An Interview with Deloitte’s Global Financial Services Industry Leader.

In conversation with Bob Contri

Thank you for agreeing to this interview. Can you begin by telling me a little about your career path to date and your role and responsibilities as Global Financial Services industry leader in Deloitte?

After completing undergraduate and business school my working career began with Deloitte. My tenure has enabled me to work with many U.S., regional and global universal banks and other financial institutions. Throughout my time at Deloitte I have been fortunate to hold a number of medium and long-term foreign assignments. These experiences are incredibly important as we aim to think more global and they allow me to better reflect the experience of our global financial services clients. Prior to leading Global Financial Services for Deloitte, I ran the U.S. Banking & Capital Markets practice and then the U.S. Financial Services practice.

As Global Financial Services Industry Leader, I am responsible for overseeing Deloitte Global’s four financial services sectors: Banking & Securities, Insurance, Investment Management, and Real Estate. This involves setting the overall strategic direction and go-to-market strategy for the practice, including helping financial services clients to respond to the myriad of regulatory, growth, technology, and innovation challenges present in today’s competitive marketplace.

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What do you see as the biggest issue confronting financial services today?

Technology. Not just automation but also the way that emerging and disruptive technology is forcing financial institutions to reimagine virtually all aspects of the business. So, if we look at the back office, for example, traditionally this was the engine of a financial institution. Until now, that’s meant structure, reliability, and efficiency—all things that are independent of revenue. But the competitive forces bearing down on financial services are also changing the way we ordinarily think about financial operations. So, for example, Application Programming Interfaces (APIs), which let software programmes communicate with each other without exposing their underlying functions, have become a way to open up the financial system to outside parties. For instance, the UK’s open API standards for banking touched off similar reform efforts in east Asia and Australia. In addition, the European Union went live with its Second Payment Services Directive (PSD2) on 13 January 2018.

With these developments, the pressure is on for firms to provide access to their proprietary environments. A key challenge, though, is the extensive IT infrastructure that powers banks, insurers, and other financial services. Decades of quick fixes, narrow point solutions, and homegrown workarounds have left incumbent institutions with a complex patchwork of legacy systems. As a result, it’s become harder for back offices to keep up with the industry's rapidly changing needs.

But the shift to an open model is making some degree of modernisation unavoidable. Leading firms are looking at how they can tighten up their internal financial processes to enable innovative development. They’re reassessing core operating infrastructure as an asset to be reused, shared, and monetised through APIs. And, increasingly, they’re looking to FinTech companies as potential partners in this endeavour.

Won’t an open-architecture environment intensify concerns about data protection and ownership?

Yes, that’s true. Data-rich financial institutions are prime targets of cyber attack. Until recently, institutions have been relatively free to follow their own path and timeline in their cyber risk management efforts. But regulators are starting to lay down some cyber security rules for financial services firms. The new regulations seem designed to establish uniformity and minimum standards, increase transparency, provide accountability, and protect policyholders from privacy violations. The obvious challenge is coping with new loss control and reporting standards. These could increase compliance budgets for those that haven’t already taken such steps. What’s more, it’s a good bet that compliance demands will multiply—not just domestically but also worldwide.

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