Global Services

product management, SunGard’s wealth management business

Creating a comprehensive mobile policy

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Today’s economic climate has led many financial services firms to shift technology investments to areas that help reduce costs and improve overall workforce productivity.  Increasingly, these investments include mobile solutions – and updating the enterprise infrastructure that is necessary to deploy and support them.

Mobile access to enterprise resources, such as CRM and client information or more sophisticated tools, can help significantly improve user productivity and client satisfaction.  But getting these capabilities into the hands of users requires much more than just investment in hardware and software.  A successful mobile strategy starts with careful planning and consideration of your business objectives.  Then, to successfully build, deploy, and manage mobile solutions, the significant technology, process, cost, and commercial risks involved must be properly addressed.

Comprehensive mobile policies share five key elements:  security, infrastructure and technology, user mobility and use policy, support, and future-proofing.

Securing mobile devices and the corporate assets on them is a challenge for any enterprise, but especially so in financial services.  The first step is deciding what information and services can be accessed on a mobile device, and how securely that information must be protected. Cybercriminals are increasingly turning their attention to the mobile channel, hoping to exploit security gaps that have already been closed on the web.  Many people are less aware of what constitutes risky behavior on their mobile device as compared to their desktop PC, and locking down employee-owned devices is impractical.  User profiling is not foolproof, and device hardware ‘sectioning’ tools are still nascent.  Ensuring your mobile infrastructure uses secure transport and data encryption is important, but the most effective approach to mobile security includes a combination of security at the infrastructure, communication, application and device levels, coupled with a robust policy that specifies what users can do with mobile applications and data.

Leveraging your firm’s existing infrastructure can help significantly reduce the costs and risks associated with deploying mobile solutions.  Making sure new technology and processes are compatible and easily integrated with existing systems is critical.  Firms should assess their hardware platforms, operating system and database software, software development tools and environments, communications, technical standards, internal and external data and business logic interfaces (and the physical location of data), as well as configuration management, support infrastructure, and release control procedures.

When creating a mobile policy, device management and inventory, user management and recognition, data access and authentication, analytics, performance monitoring, and mobility profiling as they relate to security must be considered.  These capabilities play a big role in developing a comprehensive information and device security policy, and are further complicated in the 70% of companies that already support devices owned by employees.  It is important to address the reality of lost and stolen devices, as well; regardless of whether it is an employee’s personal device or one provided by the firm, protecting corporate data requires a policy that covers both the reporting of lost devices and how and when lost devices are wiped.

An organization’s approach to supporting mobile devices and applications should address what apps and devices are covered, acceptable use of the information, loss prevention and recourse, and device repair and replacement.  If employees are allowed to access corporate assets on personal mobile devices, then the firm must decide on the amount and type of support that is offered to users and the additional security or policy measures required to mitigate risk. A training policy is also essential to cover mobile-specific risks, regulatory and compliance issues, and best practices.

As device and operating system fragmentation continue to increase, no comprehensive plan is complete without protecting the firm’s mobile investment against the next technology innovation.  The most effective mobile apps tend to be targeted at specific tasks most important to a mobile user.  These types of solutions often need access to a smaller, more manageable set of data interfaces than larger, more comprehensive enterprise applications.  If a firm’s core infrastructure is secure, scalable and designed to support modern Web services, development teams find it easier and more cost-effective to build new solutions on top of existing enterprise assets, and keep them current.

Mobile technology can help greatly improve the experience and productivity of the people that interact with firms utilizing it.  But it is vital to approach mobility with a comprehensive strategy, paired with effective policies and controls to manage costs, reduce exposure to data loss, prevent security breaches and compliance issues, and extend the useful life of technology investments.

senior manager, SunGard Global Services

How rich is your wealth management technology?

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The success of any firm’s wealth management business depends in large part on the capabilities of the technology that is employed.

When evaluating your wealth management technology or evaluating a vendor offering, consider these critical needs:

  1. Is the platform client driven? To remain competitive, consolidating accounts and relationships is imperative to managing and retaining clients.
  2. Does the platform have a solid financial planning component? To compete in the wealth management business, firms must understand the entire client picture – their needs, goals and retirement plans. Without a sound financial planning tool, it is difficult to keep the pace.
  3. How solid is the platform’s customer relationship management? While CRM can mean different things to different applications, having the tools to properly manage and stay connected with clients is crucial.
  4. How flexible is the platform’s integration? Does your firm’s investment advisor framework provide a simple experience, and is it open enough to integrate additional products into a single interface? Is it web-based, or are there portions that must reside on the advisor desktop?
  5. Do you have a reliable on-boarding tool for new clients? How easy is it to maintain your client and account data?
  6. How robust is the trade interface, and how expansive is the range of asset classes you are able to offer your clients?
  7. Does the platform have the ability to reevaluate and rebalance portfolios based on the client’s changing financial needs?
  8. Is the platform ready for the new regulations around cost basis processing?
  9. How integrated is its data management capabilities? Can it bring together all of your wealth management information, and provide informative dashboard reporting to your financial advisors and wealth management executives?

These nine wealth management technology requirements are critical to wealth managers’ ability to attract and retain clients and grow their businesses.  The right platform can help them increase their efficiency, productivity and value to clients as a trusted advisor.

How well is your technology platform addressing your wealth management needs?

 

chief executive officer, SunGard Financial Systems

Capitalize on Change

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Wherever you sit or whatever job you do, you’ve just witnessed the biggest change to the financial services industry in living memory.  A wave of regulations, the growth of emerging markets, and revolutionary technologies are not only reshaping the financial services industry; the very pace of change has become quicker. It creates big challenges for organizations. But, with big challenges also come big opportunities.  I personally find it to be a very exciting time. We’re helping our customers capitalize on the opportunities presented by change by helping them increase transparency and efficiency and better leverage networks.

For example, our wholesale finance customers are under a lot of pressure to meet evolving regulatory requirements and accurately measure and report risk. From stress testing to data consolidation to complex calculations, we’re helping our customers capitalize on the changes in regulations. We’re helping them achieve greater transparency into their risk exposures and to create a better risk practice across and at all levels of the organization.

At the same time, improved speed and performance remain the very essence of achieving efficiency. With faster speed and better data management becoming more critical for traders, for example, algorithms and market data are taking center stage. We’re providing financial institutions with multi-asset, multi-market capabilities; award-winning algorithms, and cost-effective market data.

In the space of consumer finance, mobile networks are transforming how our customers service their clients. We’re providing more and more of our solutions on mobile applications, to help our customers connect with their clients across the spectrum of wealth, at any time, in any part of the world.

By embracing the evolution happening all around us, we’re helping our customers capitalize on change in wholesale finance, consumer finance, and corporate liquidity. At the end of the day, change ultimately creates huge opportunities for customers to differentiate and grow their businesses.

When you think about changes in the finance industry, what do you think of first? The impacts of the Dodd-Frank Act and liquidity issues? The move of OTC derivatives to central clearing? Or the rise of the emerging markets and new wealth in the BRIC countries?

We look forward to continuing the discussion on many of these topics online on our TEN web site as well as at our live SunGard City Day events around the world. Please join in the conversation, we want to help you  capitalize on change.

partner, SunGard’s Wealth Management Global Services

Which do you prefer? A lump sum or a lifetime guarantee?

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“If I could give you a choice between 1000 gallons of coffee on the day you retire or a guarantee of receiving 3 cups of coffee each day for the rest of your life after you retire, which option would you choose?” The question struck me as somewhat odd for several reasons, not to mention the fact that I am not a coffee drinker!  However, the real point of the question gets to the heart of the recent interest in retirement income products in the defined contribution plan market.  If you give me 1000 gallons of coffee (or my personally preferred drink of iced tea), how would I know that 1000 gallons would be enough to last for the rest of my life?  How would I take care of that much coffee and keep it fresh?  How much could I drink each day and not run out?  What if I currently average drinking more than 3 cups per day?  Will I be able to adjust to a lower standard of coffee drinking?

The retirement industry has seen numerous changes over the past 30 years, since the advent of 401(k).  For decades, the bulk of corporate retirement plans were based on the defined benefit (DB) model, where a company makes a commitment to their employees of a future specific benefit at retirement.  However, this model creates a future liability for companies and is not always properly managed to remain solvent.  Because of this and the deferred tax provisions of 401(k) and similar plans, companies began moving toward defined contribution (DC) plan models.  Over the next 25 years, participants began to amass large balances toward their retirement goals (the 1000 gallons of coffee model), and participation in traditional DB plans went from 85% in 1980 to only 37% in 2004, according to the Center for Retirement Research at Boston College. DC plans saw the reverse take place, skyrocketing from 38% to 80% in the same time frame.1

A perfect storm occurred in 2008, just as the largest population block in our country (Baby Boomers) began to reach retirement age.  As a result of the economic collapse and the market going from 14,000 to 6,600 in a matter of months, investor confidence toward their retirement was shaken.  People were forced to continue working, if they had a job.  Suddenly individual investors did not feel as invincible as they once had. 

If you posed our coffee question to many individuals in 2007 or early 2008, there would be a much higher percentage of those who would have chosen the 1000 gallons option.  Today however, people are much more inclined towards the guaranteed 3 cups per day for life.  Their 1000 gallons had been reduced, in some cases to less than 500.  According to a study done by Fidelity during the financial crisis, 85% of Americans aged 55-70 placed a higher value on guaranteed monthly income than above average investment gains.2

Retirement income products have been around for a long time.  However, until recently there was not much push towards integrating these products into the DC plans that are offered by employers.  They were often thought of as a post retirement product readily available in the open market through your investment advisor.  These integrated products have a variety of features, but usually have some form of equity investment with a fixed income component that increases as the participant nears retirement. 

Regardless of the product definition, these products generally have features or product rules that can be difficult for recordkeeping systems to administer.  These difficulties include, managing:

  • participant education and communications about the products,
  • the income projection process, including the fixed income component, and
  • the maturity process when the participant begins retirement.

Because of these and other challenges, recordkeepers have been hesitant to get onboard with implementing retirement income products.

Is your organization working to ensure that your clients can choose the security of those 3 cups per day at retirement?  If so, tell us about the challenges you have seen.

Credits:

  1. http://www.towersperrin.com/tp/getwebcachedoc?webc=TILL/USA/2007/200703/Emp2007RetirementFinal.pdf
  2. http://www.businessweek.com/print/managing/content/oct2009/ca20091016_119704.htm

head of product management, SunGard Financial Systems

Transparency, Efficiency and Networks Reshaping Financial Services in 2010

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Financial institutions worldwide are cautiously optimistic about 2010. While CIOs are not planning huge IT budget increases, they are focusing on three main areas: (1) improving transparency, (2) increasing efficiency, and (3) leveraging networks.

Regulators and investors alike want more visibility into the business. Regulators want to be confident that executives have a firm grasp of their risk and certain that banks have the right level of capital reserves to weather any future storm.

Transparency requires the right data and the right analytics for data to become actionable in a timely manner. The data is there, but it is often inaccessible, incomplete and inconsistent. Getting data out of many systems is a real challenge. Then it’s a question of how fast it can be analyzed to get results.

Risk and compliance will consume firms’ resources going forward. Firms will need to unlock data for better risk management, and for meeting increased reporting requirements.

Past focus on cost cutting has shifted to efficiency. Firms are looking for better ways to leverage existing resources and gain efficiency for growth and profitability.

The main areas of focus around efficiency include automating (1) processes with increasing volumes to ensure lower cost scalability, (2) labor intensive, paper based or manual processes to reduce operational risk, and (3) customer facing processes to increase customer satisfaction.

Legacy infrastructures and well established business processes create many challenges. Changing workflows of information and people can be difficult. New processes can get locked into place, making it difficult to adapt to new circumstances.

Business Process Management (BPM) can help solve this problem. Our whole move to SaaS solutions aligns with the desire to be more efficient. On-demand solutions allow for quick access to capabilities as they’re needed, procurement based actual usage, and rapid implementation without the IT strain.

Firms will continue to leverage networks to automate the business value chain or the “ecosystem” of institutions that work together. Networks connect firms together, giving them more choices and business opportunity.

Choosing the right networks is a challenge. They need to get firms to the right places and offer additional value along the way. SunGard’s global trading network gives firms the ability to access new markets, offer new asset classes, and tap into additional services such as unique pools of liquidity.

In capital markets, the smaller mid-tier brokers see a real opportunity for growth. To succeed, they’ll need a transaction processing infrastructure on a global network to access the venues that provide best execution, most aggressive rebates and best liquidity.

What do you see as the biggest challenges related to transparency, efficiency and networks? How is your firm managing them?