Tag: finance

Chartis Research puts finance on its RDAR

dividendradarChartis Research, in collaboration with our research partner BearingPoint, has released a cost-attribution model that financial institutions can use as a diagnostic tool to benchmark their Risk Data, Aggregation and Regulatory Reporting (RDAR) processes.

RDAR is the largest block of compliance expenditure within FIs and the outfit came up with all sorts of ideas which should be of help for those trying to pitch to such organisations.

The report suggests that choosing the right operational structure for compliance is critical – small, regional reporting platforms deliver lower core spending overall than global reporting platforms, but at a much higher residual cost, and higher compliance costs overall. Integrated platforms delivered the lowest total cost by some margin.

It says that demand is growing for utilities, driven by the relentless need to reduce cost, particularly in peripheral processes – such as capital markets reports for small regional banks – and non-core regions for large international banks. As a result, banks will be able to achieve better-optimised trade-offs between key operational concerns (e.g. centralisation vs localisation) at a lower cost.

“In all scenarios, complexity emerged as a major determining factor of cost – asset managers and investment banks, using simpler, more centralised reporting platforms, fared much better than retail banks, as did those with a smaller geographical footprint. For large, universal banks, the benefits of a fully integrated solution over narrow, regional compliance centres will be material”, the report said.

“Our model has allowed us to isolate specific levers and drivers of cost reduction (and cost intensity), effectively showing which levers can be pulled to what effect. Regarding turning theory into action, this is the crucial next step”, it added.

There are five key organisational levers and the areas of cost impact controlled by them. Of the five, three emerged as being crucial drivers of cost:

  • The centralisation of data storage.
  • Uniformity of the feed handler environment.
  • Availability of APIs.

So, while FIs using integrated platforms for data management have lower overall compliance spending, less efficient regional spenders could still make significant cost gains through the use of APIs, spending significantly less on data input, enrichment and distribution than those without them. The efficient use of feed handlers magnifies merely this positive effect.

You can download the full report here

 

 

Internet of things means $100 billion spend

Nuclear power plant - Wikimedia CommonsGovernments around the world are waking up to the security implications as the internet of things is set to pervade the world and will spend an immense amount of money to improve cyber security.

The internet of things is a catch all term for a time when just about anything you care to imagine has semiconductors inside, able to communicate with just about everything else.

ABI Research said that it estimates that cybersecurity spending will hit $109 billion by the end of this decade, with governments in North America and Europe spending and spending again on security for network, for systems and for data.

The governments, said ABI, will concentrate on security for the financial, energy and defence sectors as they are the ones most targeted.

The energy sector is under particular threat, with attacks on industrial control systems.

However, there are sectors which are particularly vulnerable, including utility companies, said Michela Menting, practice director at ABI Research.

She said: “IT spending will dominate cyber security investment for critical infrastructure protection to the detriment of securing operational technologies in industrial settings.”

Apple and Google Play blocked

onedollarIt is starting to look like the numbers of retailers who back Apple, Google pay is shrinking rather than growing, and that US retailers are rushing to set up their own system instead.

When Apple launched Apple Pay in September, the list of retailers who backed it was long, but in the weeks following the launch, some major retailers have blocked it in favour of a competing option set to debut in 2015.

Apple Pay was operational at NFC terminals at Rite Aid and CVS, both non-Apple Pay partners, but was reportedly disabled over the course of the last 48 hours.

A CVS employee said that the company disabled NFC payments over the weekend which would also prevent Google Wallet users from using NFC payments.

A leaked memo, revealed on Friday by Slashgear, suggested that the retailers have decided they want nothing to do with Apple Pay and are working with a group of large retailers to develop a mobile wallet that allows for mobile payments attached to credit cards and bank accounts directly from a smart phone. We expect to have this feature available in the first half of 2015.

The new payment system mentioned in the alleged leaked Rite Aid memo is a solution developed by Merchant Customer Exchange  called CurrentC. Other confirmed major retailers included in the system will be CVS, Kmart, Sears, Target, Walmart, Best Buy and 7 Eleven, the cream of the crop of mainstream retailers in the US.

The Tame Apple Press is screaming blue murder at the scheme which is likely to allow merchants to avoid paying credit card processing fees and give them more information about customers.  Everyone knows that this sort of data should be in the hands of technology companies rather than retailers.

But what this means is that Apple Pay may have the traction that the Tame Apple Press claimed.

Vodafone revenues down

vodafoneVodafone’s revenues for the three months ending 30 June plummeted 3.5 percent.

Much of the blame was directed at economic difficulties in Europe. The German market, Vodafone’s largest, dropped 5.1 percent. In the UK revenues fell 4.5 percent. Overall service revenues for Europe declined 14.4 percent – with a serious 10.6 percent and 17.6 percent drop in Spain and Italy respectively.

Chief executive acknowledged blamed weak economies in Southern Europe for restricting revenue growth as well as “regulation” and competitive pressure.

Vodafone last month bought Kabel Deutschland for €7.7 billion – hoping to bolster its position in that market and offer other services like broadband and TV.

Telco analysts at IHS pointed out the Q2 results were at least slightly better than the 4.2 percent decline it suffered in Q4 2012. But it stamped on hopes for growth that emerged the same time last year, where it grew one percent year on year.

Vodafone performed comparably well in India and there is steady sales and subscription growth across the African continent, with Egypt in particular surviving the storm despite ongoing intense political turmoil.