The banking industry operating model is broken and needs dramatic reinvention for banks to survive in the longer term.

The clear parallels

As we look at the banking industry operating model today, it looks similar to that of the airline industry in the late 1980s.  The entire business value chain proprietary owned and operated by the airlines themselves, including non-core functions, such as ticketing, luggage handling, ground services and catering etc. This model resulted in little to no recurring investment in the non-core functions that were considered low value, cost centres. In reality, these functions were instead subject to continuous cost challenge without investment. This approach did little for client experience, operational efficiency and risk management. Morale of the staff who had the thankless task of managing and maintaining service continuity in these functions was extremely low (sound familiar?). Further, this model distracted investment and management focus from delivering differentiation in the airline’s core proposition. The outcome – poor quality services, customer dissatisfaction and consistent failure to deliver on a strategic return on equity; and in some cases business failure.

Thankfully with the benefit of hindsight, we can also look to the airline industry for the solution – adoption of a supply chain model.  Integration into an eco-system of specialist providers/strategic business partners providing non-core services and functions. By developing standardised services on multi-tenanted platforms to multiple airlines, these specialist providers were able to achieve utility scale and the platform investment not possible for a single airline operator. In turn, this allowed the airlines to focus on differentiation of proposition. The outcome – improved cost income ratios, better quality support services and enhanced customer experiences, resulting in improved returns on equity.

However, despite these clear lessons, and banking industry executives agreement on the topic, industry body research and advice from leading strategic advisory firms over the years – the industry still remains lethargic and little action has been taken.

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London, 22 March 2020 – Delta Capita Group, a global consulting, solutions and managed services provider, has secured a $50m equity investment from Prytek Holdings and gained access to over $100m of capital for future acquisitions and funding for client transactions. The investment enables Delta Capita to further expand as one of Europe’s leading service providers and fintech technology hubs.

Prytek, the multinational corporation headquartered in Singapore, focuses on technology investments and operations-as-a-service companies, with a $300m diverse portfolio across fintech, edutech, artificial intelligence, cyber security and human resources. Following this transaction, Delta Capita will become the financial services arm of Prytek, bringing a range of innovation and technology to its clients.

Prytek’s Managing Partner, Andrey Yashunsky says, “Delta Capita has a unique combination of experience in Financial Services and technology innovation capability allowing it to offer outstanding managed services and solutions to its clients. Delta Capita will now benefit from access to the 35 innovative technology companies across the Prytek Group.”

Delta Capita’s CEO Joe Channer says, “Access to Prytek’s capital and growing portfolio, provides further leverage for Delta Capita and its growth as one of Europe’s largest fintech solutions and service providers.”

Delta Capita has recently been recognised by the Financial Times as one of the fastest growing businesses for 2020. This announcement follows the recent appointments of a number of high profile industry leaders including:

  • David Long (Board Member)
  • Philip Freeborn (Head of Pricing and Risk Services)
  • Gary McClure (Head of KYC Services) and
  • Gary Bullock (Head of Post Trade Services)

For further details please contact:

  • Prytek: Hedan Orenstein (hedan@ohpr.co.i)
  • Delta Capita: Lindsay Jones (lindsay.jones@deltacapita.com)

London, 12 February 2020 – Ahead of Securities Financing Transaction Regulation (SFTR) go-live, UnaVista has established collaboration with Delta Capita to provide UnaVista clients with access to the latest standardised SFTR data test pack with industry consensus.

SFTR regulation mandates firms to report SFTR transactions from April 2020. Testing prior regulatory reporting go-live is one of the most important aspects of preparation.

Why Testing?

Failure to test properly can lead to more breaks, operational delays and potential sanctions.

By using this industry-standard test pack, UnaVista clients are able to thoroughly test and prepare for SFTR, by utilising all the tools they might need for this, including:

  • comprehensive model of scenarios, events and validation rules; all traceable to ESMA’s RTS and ITS (approximately 5,000 field level tests and 240 test events),
  • all of the trade and reference data that are needed to test,
  • the expected results to help diagnose any issues,
  • peer group benchmarking of your test progress.

Testing can be difficult, but the Test Pack is designed to ensure you can save time and have confidence you are using the industry consensus for your results.

  • It provides full traceability to help with audits
  • It can evolve when the rules change
  • It is widely accepted, being already used by 10+ large sell-side firms

The SFTR Test Pack includes:

  • A generic interactive standardised model of SFTR business scenarios (html format) providing clients with a holistic integrated navigable view of:
    • traceability from authority source (e.g. RTS)
    • product business scenario definitions (e.g. cleared / uncleared)
    • life cycle events (e.g. recalls, returns, corporate actions)
    • event / report triggers (which SFTR reports are triggered by which events)
    • data attributes per report with conditionality and validation rules
  • A set of standard test trades and supporting data (CSV format) selected by the client for use in its UAT
  • A set of expected results (CSV and ISO20022 format) based on the standard test trades and supporting data containing the SFTR reports that should be produced by the client’s systems
  • Benchmark information comparing client test progress with anonymised results from other clients
  • All Test Pack artefacts will be made available for download from a secure site

The Test pack scope:

  • Product scope includes: repo, securities borrow/loan (stock and commodities), buy/sell back and all counterpart pairs, scenarios and life cycle events defined in the SFTR Test Pack Strategy
  • Product scope excludes: Securities Borrow/Loan (SBL) clearing; margin lending and collateral re-use (cash re-investment and funding sources)

For more information, or a demo of the SFTR Test Pack, please click here & fill in your details on the form provided.

London, 9 September 2019 – Delta Capita, the international business and technology consulting and managed services firm, has today announced it is collaborating with The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, to help market participants meet their Securities Financing Transactions Regulation (SFTR) trade reporting obligations.

Delta Capita’s banking consortium is creating a standardised SFTR industry test pack. Under this new collaboration, Delta Capita will make the test pack available to DTCC to test its own SFTR matching and reporting service prior to launch. DTCC opened user-acceptance testing with industry vendors on August 30, 2019.

Clients of DTCC’s Global Trade Repository (GTR) service for SFTR – who independently license the consortium’s test pack – will benefit from knowing the service has already been tested, reducing their own testing effort and costs and ensuring readiness for trade reporting. Furthermore, DTCC will make its data transformation services available to Delta Capita’s banking consortium to assist with the creation of trade repository (TR)-ready ISO 20022 SFTR reports.

David Field, head of securities finance practice at Delta Capita, said: “Our test pack will provide full traceability to the European Commission’s regulatory technical standards (RTS), the European Securities and Markets Authority (ESMA)’s guidance, and best practices across repo, sell/buy-back and stock borrow/loan. It will provide users with the test data, test instructions and expected results to conduct their user acceptance testing (UAT), and to test with their counterparts, trading venues, service providers, central counterparties (CCPs), tri-party agents and trade repositories. Consortium members will be able to benchmark their testing run and pass rates to highlight any areas for review and remediation.”

Val Wotton, managing director, product development and strategy, repository & derivatives services (RDS) and collateral management at DTCC, said: “This new collaboration will provide a first-class testing experience for our clients. We are delighted to continue working with Delta Capita to ensure that our clients are well-prepared to meet their SFTR obligations.”

The consortium output can help any firm strengthen their SFTR testing in line with industry leaders. To find out more please see https://deltacapita.com/news/delta-capita-forms-sftr-testing-consortium and contact david.field@deltacapita.com.

The IBOR transition is both an opportunity and a threat to every financial institution. The opportunity is that a clean, well-managed IBOR transformation will enable a firm to take advantage of the possibilities that arise from changing one of the foundations of current financial markets. The threat is that a poorly managed, lagging transition will at best cost a firm market share and at worst incur significant regulatory attention and intervention.

The FCA as lead regulator is making it clear that Friday December 31, 2021 (YE 2021) is the hard deadline for the end of LIBOR. Industry bodies (ISDA etc.) and working groups are currently finalising the new fallback and trigger provisions for each product to create a transition path away from IBOR. The current proposals differ significantly across products, countries, and timeframes and the transition from unified IBOR term rates to multiple differing solutions is creating many issues, some of which have yet to be identified due to the uncertainty involved.

Want to learn more? Click here to receive the full, free white paper directly to your email inbox.

London, 4 July 2019 – Gary McClure has joined financial services professional services firm Delta Capita in its London office. The former HSBC executive will head Delta Capita’s KYC services business starting in September. 

“Gary’s industry experience in financial crime and KYC operations will provide the right leadership. We are very pleased that Gary is joining,” said Joe Channer, Delta Capita’s founder and chief executive.

McClure brings over 25 years of industry experience to the London-headquartered consultancy. Most recently, he was a Managing Director at HSBC, responsible for the global KYC operations function across investment, commercial and retail banking. Prior to that he headed up client onboarding at Barclays Capital and was an Executive Director in UBS’s global banking and markets operations business covering KYC and client data operations. McClure started his career in consulting at PwC, and later on also served Big Four rival KPMG prior to moving into banking.

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London, 2 July 2019 – Delta Capita, the international business & technology consulting and managed services firm, Pirum Systems and IHS Markit, announced today they will cooperate with an industry testing consortium to help firms meet the requirements of SFTR.

Delta Capita recently announced the creation of a consortium of banks to establish a standardised SFTR industry test pack. Under this new collaboration, Delta Capita will make the test pack available to IHS Markit and Pirum to support testing and provide feedback to the consortium.

Customers of the joint IHS Markit and Pirum SFTR solution who have independently licensed the consortium test pack will benefit from knowing the service has been reviewed by the SFTR solution providers, raising confidence in the service and potentially reducing their own testing effort and costs.

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In a recent article published in the Securities Lending Times SFTR 2019 Annual, Jonathan Adams (Managing Principal, Delta Capita) questions whether SFTR will ultimately deliver more efficiency and transparency to the securities finance market.

When the first Securities Financing Transactions Regulation regulatory technical standard (RTS) was released to market participants for consultation, it was met with dubious distain. Of the 153 fields, few could imagine how it would be possible to report more than 30 fields. Settlement matching had been on dates, security identifiers, counterparty information and economic terms.

It begs the question, how can a reporting regime of this complexity, fraught with the risk of matching failure, serve the regulator in determining the potential for systemic failure? Moreover, how can it benefit market participants?

Click here to read the full article.

London and Frederick, MD, 18 June 2019 HighGear, a leading no-code workflow automation platform provider, today announced its strategic partnership with Delta Capita, the fastest growing financial services consultancy in Europe, to provide fintech and workflow automation solutions to the European financial services sector.

By combining the unprecedented speed of HighGear’s no-code workflow automation platform with Delta Capita’s business consulting, technology and managed services expertise, customers in the financial services, banking and insurance industries will be able to improve efficiency, streamline operations and accelerate digital transformation.

 

 

 

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London, 12th June 2019 – Delta Capita, the international Financial Services consulting and managed services firm, has appointed Emerson Boix to lead the Securities Financing Transactions Regulation (SFTR) Test Consortium technical implementation.  He will be based at Delta Capita’s global headquarters in Canary Wharf, London.

Emerson brings more than 20 years’ banking experience ranging from the design of collateralised repo obligations for Barclays Capital to operational experience across corporate actions, dividends, recalls and collateral re-use at Citibank.  Emerson most recently worked on securities finance projects, defining target operating models in preparation for BREXIT and performing SFTR impact assessments.  In the last decade Emerson has worked on almost all regulatory changes from Basel II, EMIR and MiFID I to a global implementation of MiFID II for Bank of America Merrill Lynch (BAML) as their regulatory subject matter expert.

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