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BJSS Industries: Financial Services

Six out of every 10 foreign exchange trades worldwide take place using a system built and delivered by BJSS.

Today’s Financial Services sector is driven by innovation, consolidation and regulatory compliance.

From the early days of electronic trading to recent developments in high frequency, low latency trade matching, BJSS has over 20 years’ experience of the technical challenges of operating in financial markets. We’ve engaged with global investments banks, inter-dealer brokers, retail banks and a diverse range of financial services organisations to deliver a broad range of business-critical systems. We have a detailed understanding of delivering front, middle and back office systems across a range of asset classes including FX, Equities, Fixed Income, Money Markets and Interest Rate Swaps / derivatives.

Richard Meirion-Williams

Practice Lead: Financial Services

I’ve worked in the  Financial Services Industry for over 20 years with broad experience in Retail and Investment Banking and Insurance consulting typically in Business Integration and Process Management.  I’ve helped to deliver Digital projects in  the Insurance industry, sales and service effectiveness for multi-channel Banking and Middle and Back office IT improvement in Investment Banking and Asset Management (focusing on processes, culture and systems) and Regulatory Reporting.
Richard Meirion-Williams
Richard Meirion-Williams
Practice Lead: Financial Services

Thought Leadership: Financial Services

The Challenge for Traditional Banks

Growing regulatory capital requirements and bad press associated with ‘casino-banking’ practices has triggered a renewed interest in consumer and SME banking. A retrenchment to core banking and markets is a significant trend. Just read the banks press releases and you will see the banking collective conscience replayed: ‘deleveraging the balance sheet’, ‘reducing costs’, ‘simplifying the business’, ‘more focus on the customer’. But are these strategies more than just a ‘me-too’ response to political pressure and increasing regulation? There’s an undeniable rationality to this approach:

  1. The capital requirements for retail products are generally lower than those coming from the investment banking divisions;
  2. Bank’s product based structure has resulted in a great deal of duplication and complexity across IT and operations. This impacts customer experience and increases costs;
  3. Satisfied customers spend more and cost less for the banks to serve. American Express, for example, claims that highly satisfied customers tend to spend 10-15% more and are four to five times more likely to stay with the bank.

However, there’s one significant thing that you don’t hear the banks talking about publicly: the threat from new entrants to the banking marketplace, particularly in the loans, deposits and payment areas. Given that these products are at the heart of most consumer banking relationships, you would think that alarm bells would be sounding across boardrooms. Taking mobile payments as an example, the statistics confirm the changing behavior of consumers:

  • 70% of people in the UK now own a smartphone and almost a third of the population use these devices to make purchases.
  • Worldwide, there were $235bn of mobile payments made in 2013. This is expected to grow to $721bn by 2017.

Unfortunately for the banks, many of these payments are being made using Apps provided by niche mobile payment players as well as digital vendors. Unfortunate too (unless you are a customer) that these new entrants are often better at delivering customer service and building brand advocacy. The banks know that treating customers well is good for business. Traditional measurements of a bank’s success (return on equity, profit, cost/income ratio and so forth) have been supplemented with more customer centric indices, such as net promoter score (NPS) and other customer satisfaction measurements. For the unfamiliar, NPS is a widely used measurement of customer loyalty, developed by Bain & Co. It asks a simple question: “How likely is it that you would recommend our company/product/service to a friend or colleague?” Those who respond with a score of 0 to 6 are considered to be unhappy customers or detractors. According to the Direct Marketing Association, all participating banks in the UK, with the exception of Virgin Money had a Net Promoter Score (NPS) of  less than 60%. Compare that to Apple’s score of ~76%. The banks should worry. The technology companies are starting to own the media content, product merchandising and now the payments platform. In a recent survey by banking technology vendor Temenos, 23% of respondents felt that competitive pressures from outside the industry are at least as great as from within. They also see technology vendors such as Apple and Google as their biggest threat. And it’s not just payments where the banks are facing increasing competition. Peer to peer lenders offer attractive rates for both investor and consumer, keeping their overheads low through the use of highly integrated technology. Like a web-based dating agency, these capital-cupids match borrowers with savers who are looking for a good return. Other web-based lenders are targeting groups of customers that do not have good credit ratings. Loans are originated through a simple online application process that provides an instant lending decision. Applicants are often required to have a mobile phone and an email account – again helping to keep customer servicing costs down. It’s clear that technology is a major catalyst for growth in the banking market. It’s both a prerequisite for the things banks care about (productivity, growth, cost control, risk management etc.) and what customers care about (price, convenience, ease of use, speed and so forth). More than ever, banking and technology are two sides of the same coin and therein lies the challenge for the traditional banks.

BJSS Financial Services Successes

MiFID Compliance

BJSS delivered a comprehensive pan-European trade reporting service for OTC trades’ off-book executions. The solution acts as a standard participant on the Exchange’s FIX network. Trade reports are mapped from a standard FIX message in to the appropriate message format and passed to the Exchange. The delivery also included comprehensive automated test suites and simulators to facilitate on-going enhancement.

FX e-Commerce

BJSS designed, developed and delivered the service integration layor of a replacement FX-ecommerce solution. Required by a leading UK investment bank, BJSS was responsible for developing the connectivity services for consumption by bank-wide systems, as well as enhancing the existing foreign exchange systems to provide enhanced functionality while also delivering simplified access to functionality.

Trader Desktop

BJSS designed and developed a Trader Desktop as part of a high volume equities trading platform. Orders can be enriched with static data such as tick, size and exchange information and real time displays. Rolled out globally, the system allows traders to view and manage their orders in real-time and then choose to trade them either manually, through the in-house algorithmic trading engine, or through a broker/dark pool.