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Financial services lessons learned in 2020: Part 1

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The importance of future planning and robust architecture

If there’s one thing 2020 made evident, it’s the need for extensive disaster recovery planning and testing, a robust remote access infrastructure, and the need to plan for volatility and crises. InterSystems brought together financial services firms to share lessons learned over the last 12 months. Speakers from Credit Suisse, Broadridge Financial Solutions and Banco do Brasil Tecnologia e Serviços (BBTS) explained how their firms handled the unique challenges posed by switching from largely on premises to remote working across the globe and dealing with the markets’ unprecedented volatility.

Financial markets have been no stranger to crises and disasters—just look at the 2008 financial crisis and the various natural disasters across the globe that have impacted operations in specific geographic locations. Of course, the industry has never before faced a crisis like the one experienced in 2020, but these previous experiences have taught firms valuable lessons. Credit Suisse’s equities technology team, for example, upgraded its remote access infrastructure after the experience of Hurricane Sandy in 2012, including conducting periodic testing of its disaster recovery centers and enabling its staff to work remotely as required. This groundwork placed the firm in good stead for the challenges of 2020 and it was able to allow the majority of its staff to switch to remote work smoothly and quickly.

The equities technology team approached the challenges in a structured manner by breaking work into distinct streams including:

  • Examining remote work network capacity and rolling out necessary upgrades for business users at home to enable real-time electronic data flow.
  • Establishing communication tools for front-office staff support and reviewing the protocols for incident management in the remote working environment.
  • Conducting a full platform assessment and building on the capabilities it had established post-2008 for enhanced scalability, resilience and monitoring.

The goal of all this work was to continue to provide a robust trading and execution platform that allowed the routing or re-routing of trade flow automatically to avoid latency. The use of distributed technologies to tailor capacity based on market volume and volatility meant these goals were achieved seamlessly and machine-learning-based monitoring enabled the firm to predict problems before they happened and supported rapid problem resolution to mitigate risk. The firm’s non-real-time systems also benefited from the fact the firm had moved functions such as regulatory reporting to a cloud-hosted environment, which enabled them to scale on demand.

Similarly, Broadridge indicates that it was resilient during the crisis due to its investment in platforms that are built for scale as part of the firm’s focus on software as a service. It continues to adapt its processes in light of the pressures of 2020 and is in the process of migrating many of its services to the cloud. Much like Credit Suisse, it is focusing on a phased approach to the migration to minimize risk.

One unexpected result of all of Credit Suisse’s preparations and investments was that some of the firm’s institutional clients turned to them for advice on how to improve resilience and avoid downtime during volatility!

Credit Suisse is continuing to adapt to the new market realities and has been re-skilling its staff to adapt to new communications tools and technologies, as well as optimizing its models to hedge the coming economic downturn. BBTS also focused on bolstering its client communications during 2020 and focused on automating processes and enhancing decision-making processes using virtual environments.

The financial services community has learned many valuable lessons during 2020 and these investments will enable firms to become much better prepared for the next crisis, whenever it occurs. The necessity of a robust infrastructure that can support remote working and scale to meet the requirements of volatile markets cannot be overstated. It can mean the difference between adapting to a new business as usual and suffering significant downtime, disruption, and losses.

Hear directly from these firms by listening to the replay of the panel discussion.

Read Part 2 of the blog post series.

Read the latest blog posts on Data Excellence.

About the Author

Virginie O’Shea, Founder, Firebrand Research

Virginie O’Shea
Firebrand Research

Virginie O’Shea is a capital markets fintech research specialist, with two decades of experience in tracking financial technology developments in the sector, with a particular focus on regulatory developments, data and standards. She is the founder of Firebrand Research, a new research and advisory firm focused on providing capital markets technology and operations insights for the digital age.

Originally published on TabbFORUM, February 8, 2021.

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