Mark Holland, founding partner of Holley Holland discusses why it is vital financial services companies build flexibility into their strategic plan, work with an adaptable IT infrastructure and implement long-term goals in order to stay one step ahead of the competition and seize the day whatever happens
No business is immune to change – be it planned or unplanned, driven by internal or external factors – least of all the financial services industry. In fact, change can come in all shapes and forms such as the introduction of new regulations, tax legislation, expansion of a customer base, relocation of an outsourced call centre or the launch of a new product. However, no matter what the change, in today’s evolving financial services landscape, the question is – how quickly and effectively can a firm react to the situation at hand?
With a recent Reuters poll of more than 70 economists suggesting little better than stagnation for the Euro Zone in 2013, it is vital that businesses balance surviving in the short-term and remaining competitive, while planning for the future in order to achieve maximum success. In order to remain as competitive as possible, firms should be setting flexible long-term goals alongside the creation of an adaptable IT infrastructure and strategic plan.
Time to get flexible
Due to the large number of mergers and acquisitions across the sector, many firms have overlapping or conflicting IT infrastructures. Over the years, firms have built up complex systems with new applications bolted on as and when necessary to meet the demands of the business or to deliver new services.
The trouble is that while these fragmented systems run effectively day in and day out, if faced with change it can often be a long hard slog to initiate new processes. Some applications and technologies may be so old that they aren’t even supported by the supplier anymore but remain mission critical to the firm
Over the last 20 years, banks have also become too aggressive, too focused on the short-term profits. In 2011, Unilever boss, Paul Polman reportedly voiced concerns over companies using short-term goals to fuel profits; hitting out against the traditional City benchmark of “shareholder value”.
Firms that have had their IT infrastructure and supporting strategic plans bolted on top of each other don’t have the ability to quickly move to a new customer base, market or product. Unlike younger companies which have flexible systems and architecture as they are not tied down by legacy systems. It is critical that established firms get the right flexible strategic plan in place as without the ease and efficiency to change; it can be hard to stay ahead of competitors, get to market quickly with a new product or service or capture business efficiencies.
For example, HRMC might propose tax changes to investments held in stocks and shares such as individual saving accounts (ISAs). Working with a flexible plan, this scenario could be calculated for and integrated into the long-term goals of a firm to ease transition. On the other hand, if a firm decides to merge with another company or perhaps move its call centre to a different country, these changes could be made achievable under the scope of the existing plan to minimise upheaval. By creating a plan with adaptability at its core the integration of IT infrastructures or drive to meet new local communications and legal system requirements stops being such a headache.
Communication is key
With a gloomy short-term economic outlook and on-going scrutiny over banking practices, such as the latest ‘systems fault’ at the Royal Bank of Scotland, preventing customers from accessing their accounts, there are growing calls for IT to be regulated across the banking sector. If firms want to steer away from sanctions by regulators in the future, they need to show that they are taking control of their IT infrastructure by implementing a flexible blueprint, built to cope with rapidly changing customer requirements.
Companies regulated in the US are also subject to the Sarbanes-Oxley Act of 2002 (SOX); legislation that protects shareholders and the general public from accounting errors and fraudulent practices in the enterprise. Following suit, the UK now looks set for a move towards this type of controlled regulation.
The implementation of a flexible long-term strategic plan can also be more widely used to demonstrate to key stakeholders the on-going commitment to future proof the business. By taking a long-term view to achieve goals and clearly communicating these, it is possible to ensure the future success of an organisation.
Time to take action
The time has come for firms to take a step back and look at the bigger picture. With economists predicting that the UK will be coming out of recession in 2015, now is the time to be investing, to ensure companies are prepared to meet the demand an upturn will bring.
Companies need to know; where they are heading in the long run? What limitations do their systems create that prevent them from completing future objectives? Recognising that infrastructure change needs to fit in with long-term key objectives is vital and this can be outlined throughout a flexible strategic plan. However, when looking for flexibility, it is important that companies do not compromise on control and their infrastructure should still remain robust.
With new businesses harnessing the ability to act swiftly to change, it is critical that established firms ensure they too have the capability to work in a similarly effective way. To achieve this, firms need to gain a holistic view of existing strategic plans and IT infrastructure and establish how they can move forward with the introduction of an adaptable strategic plan with long-term goals and a moveable IT infrastructure.
Firms need to be ready for change, whether it has been on the cards for some time or thrown at them at the last minute. It’s survival of the fittest for businesses now; customers are fast running out of good will and getting in shape to succeed today and well into the future means thinking smart and planning to be adaptable.
Global Banking & Finance Review
Why waste money on news and opinions when you can access them for free?
Take advantage of our newsletter subscription and stay informed on the go!
Business4 days ago
Trinidad & Tobago Unit Trust Corporation Expands Caribbean Footprint with the Promise of More ‘Transformational Changes’
Banking2 days ago
Open banking: Shaping the future of FinTech and Finance
Top Stories23 hours ago
France’s Eramet and Suez pick Dunkirk for EV battery recycling
Technology3 days ago
It is a certainty that new roles will be created as a result of AI – we just don’t know what they are yet