Financial Services

Financial services companies operate in one of the most competitive and highly regulated business environments of any industry. Not only are organizations within this industry subject to intense global competition, but they are always looking to carve out niches for consumer products and services.

With few new clients available, financial services firms must up-sell/cross-sell to current customers or win market share from their rivals in order to grow their businesses. Since many firms are offering higher returns and lower fees to attract new business, financial services organizations must work diligently to drive down the cost of their internal processes while displaying a greater level of customer intimacy.

These challenges drive banks, insurance companies, and securities firms to change the way they manage client relationships. ERT Group solutions help institutions find ways to share a comprehensive view of each client with all parts of their organization. By doing so, the client can be effectively supported and business processes between groups within the organization can be integrated, reducing paperwork and lowering costs.

Overview:

The financial services industry includes many different types of companies, such as: security brokers, investment banks, stock exchanges, and credit card companies.  The industry is heavily concentrated and a small group of large players dominate the vast majority of the industry.  Most companies in the industry are in the midst of dealing with the impact of an uncertain economic outlook and industry issues regarding trading practices and an overall volatility in the capital markets.

Market Scope:

Demand is driven by economic activity that results in company mergers, acquisitions, or public financing. Sub-prime mortgage lending fueled the credit crunch during the second half of 2008/2009 and credit market turmoil dominated the headlines during the fourth quarter of 2008.  The global effects of this debacle will continue to be felt well into 2009/2010.

Financial services organizations are facing the most serious and prolonged crisis since the 1930s. Uncertainty, instability and resulting write-downs are infecting ever more sections of the market. Funding is drying up. Equity values are becoming ever more volatile. Demand for financial products and services is falling back amid an accelerating slowdown in the global economy and dip in business and consumer confidence.

While demanding, the current market environment could open up valuable opportunities for growth. Strongly capitalized groups are in a favorable position to pursue ambitious acquisition and business development strategies. Firms that can effectively manage costs and enhance understanding of individual customers’ evolving needs will be able to build enduring and profitable client relationships. Emerging markets and alternative investment sectors also continue to offer significant potential for expansion.

Industry Issues:

Volatility in the Industry and the Economic slowdown – The declining US and global economy, in the wake of the US mortgage crisis and global problems with trading activities will take time to overcome.  Financial Service companies are working to solidify that they are stable and to make the necessary changes to their risk management policies so as to prevent a repeat of the current market volatility and its effect on the economy.

Changes in Regulations – With revisions to the Basel II accord and regulators from many countries looking at the recent crisis and volatility within the Financial Services industry, it appears virtually certain that some changes in current regulations are on the horizon.  It is important for companies to stay on top of these changes and be able to quickly and as cost efficiently as possible adapt to any changes in regulations.

Cost Reduction and Global Presence – One of the greatest challenges in financial services today is to maximize your company’s opportunities in the global economy. Expanding into different parts of your country, region or the world is key to maintaining competitive revenue levels and growth, but it is important to foster this growth without large increases to your expenses.

Regulatory Compliance – Financial Services is a highly regulated industry around the globe and those regulations change on a regular basis. Too often there are high costs associated with keeping up with these changes and the compliance and reporting they dictate. This often results in high audit and legal fees, high costs to monitor the regulations and high costs related to technology changes necessary to comply with the changing regulations.

Economies of Scale - Mergers and acquisitions in this industry have been a frequent occurrence for many years now. One of the benefits of mergers and acquisitions is the boost to income while controlling the increase in expenses. However, it is often the case that the expected cost savings from these economies of scale are not achieved, or not achieved to the predicted level or in the expected timeframe.

Data Security – Data security is a major concern in all industries. In recent years there have been several major data breaches in the news; this has prompted more regulations around data security. No company wants their data to be at risk, but the cost associated with protecting data and preventing unauthorized access to data is costly and constantly changing.

Disaster Recovery – While no one plans for a major disaster or system crash having a reliable and real-time backup system is paramount in a data and transactional intense industry like Financial Services. Quick recovery from a disaster will help to prevent a loss of customers and avoid potentially high costs associated with manual data recovery and transaction recreation.

ERT Group Solutions Benefits:

Provide a comprehensive view of the client

• Gain real-time visibility into customer data from multiple databases.
• Track all customer-facing interactions across multiple communication channels.
• Monitor and analyze customer needs to maximize cross-sell/up-sell opportunities and quickly adapt for changing customer needs.

Reduce the administrative burden on financial advisors

• Enable financial advisors to work more efficiently across information sources and distribution channels.
• Integrate sales, marketing, and customer service.
• Easily incorporate changes for regulations and compliance.

Improve banking customer service

• Renew channels, such as ATMs, call centers, teller systems, or in-branch advisor systems, with reusable business components.
• Improve consistency of customer service across channels.

Link disconnected insurance processes and systems

• Integrate applications and workflow processes that span distribution networks, service providers, policy administrators, claims processing, and re-insurance.
• Create a seamless link with the customer.