The true value of client principles

In the next instalment of our six part series analysing the transformation that is required in investment banking operations, we reveal the essential principle that is necessary to achieve the full realisable value of the client.

The client-centred processing principle prescribes that banking operations should be performed in a way that is fully aligned with the viewpoint of the client. Accepting that a client may be external or internal (as defined in last week’s blog ‘Time to give the client more control’ by Jeremy Taylor), typically means that all information (transactions, position, balances, reference data etc.) relating to a client should be available in a single and consolidated way. For example, a client with trading activity in multiple financial products, in more than one country, or in different market roles, should be able to have all their business data available to them in one place within the bank (subject to data protection rules).

This ‘single client view’ concept not only contributes to a better operational function, it also leads to an improved client experience, a stronger operational risk management function and potentially better controls in the event of a client trading suspension or closedown.

A further benefit of client-centred processing is that it provides an ability to more accurately align operational activities to the true value of the client (i.e. their profitability). This is an important success factor as many banks are now aspiring towards reducing their services to lower value clients and even contemplating releasing them.

As highlighted in last weeks blog on the principle of client self-servicing, both client centred processing and client self-servicing in investment banking requires the adoption of the same web based technologies that are already widely used in retail banking and other industries. Both principles must be fully undertaken for true transformation – anything else would be a compromise with only limited lasting benefit. 

Additionally, there is also an opportunity to do more than provide web user interfaces such as providing clients with the ability to transfer data via downloads/uploads and perhaps incorporating other digital channels. An important aspect will be the implementation of a whole client view. This should be achievable by aggregating data from multiple systems using data aggregation toolsets from enterprise data solution vendors or big data software providers. Client orientation in operations is highly feasible with today’s technology.

The full realisable value of true transformation is only achievable with the full realisable value of the client.

That is the true value of the client principles.