Nearshoring financial operations is increasingly in the spotlight due to the significant number of companies bringing hubs back onto US soil over the last year. Delta Capita have seen our clients’ post trade services (PTS) expand in US locations from Florida to Minnesota, Texas and Utah - all driven by post-pandemic strategy.
This is part of a much wider trend with 90% of companies, from every sector, planning to bring parts of production closer to where products are sold, according to a McKinsey survey from November 2021.
Many financial firms have had to rethink their location strategy as they adapt to changing mindsets. Driving factors include the desire for location mobility; improved trust in connectivity between office locations; and evidence that employees can work from home successfully.
Nearshoring is commonly defined as sourcing service activities to a neighboring country. But this definition omits the benefits of the structure and size of the US, which enable companies to gain competitive advantage by nearshoring to any of its 50 states.
The difference in cost profile between states enables financial firms to review locational working models and get ahead of competitors by attracting local talent. Those who continue to grow their nearshore locations with a well-organized strategy will benefit from efficiency gains, increased productivity, and reduced costs. Time zone proximity and cultural similarity between states also reduce the risk of relocation failure.
Impact on post trade services
Nearshoring can bring a natural advantage to financial post trade services. Opportunities to nearshore PTS are no longer confined to typical back office functions, and the industry is shifting toward full-scale operations moves. These include cash and securities processing, derivatives documentation, loan operations and middle office support. But with the increase in complexity and number of functions, organizations must ensure a successful first-time approach and have sufficient support to maintain new functions.
As financial services firms grow in new geographies, they must train and develop local talent who are often new to the industry. The key to doing this is ensuring sufficient support, a balance between industry practitioners, seasoned management and relocating staff. This ensures the right level of experience and continuation of company culture.
How Delta Capita can help
At Delta Capita, we work closely with US clients to plan, implement, stabilize and grow PTS nearshore solutions. We help them work holistically, from operating model creation to burst capacity support; transition and stability resourcing; and post go-live remediation. Our learning and development Academy - which trains 250 consultants a month on over 350 modules - can be used to create a bespoke train and deploy model, ensuring you get the skills you need for your various functions.
Delta Capita’s experienced industry practitioners and trained PTS staff collaborate to create targeted solutions and teams. These teams and solutions help you solve your problems, maintain high quality service, and minimize your operational risk - allowing you to invest in differentiation and maintain competitive advantage.
To discuss how we can support your nearshore solutions, contact us today and speak to one of our experts.
This article was co-written by Tom Sutton; Senior Manager, Post-Trade Services at Delta Capita.
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