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Outsourcing services in a challenging time
Journal of Securities Operations & Custody,
13
(4),
365-373
(2021)
Abstract
The buy-side industry has for many years been looking into outsourcing operational processes to focus more on creating Alpha and value adding to the business. Regulatory requirements increased the aftermath of the financial crisis in 2008, where especially the introduction of Dodd-Frank in the United States and European Market Infrastructure Regulation (EMIR) in Europe has changed the role of the operations department. Reporting, monitoring, confirmations, reconciliation, digitalisation in the trading space and collateral management were all part of the new transparency and risk mitigating regime, putting pressure on all players in the financial industry, but the regulation has also catered for innovation, new market players and new services, and we have also seen a shift in the staffing in the back- and middle-office area. You need business analysts who knows more than just how to match a trade, execute payments and do classic reconciliation, and you need an outsourcing provider who is treating the relationship as a true partnership — and what has become even more obvious in 2020 is that you need to have a partner who knows how to (re-) act in a time of stressed market conditions and have prudent business contingency plan (BCP) in place.
Keywords: regulation; outsourcing; contingency planning; trading strategy; business analyst; time-to-market; COVID-19; working from home
The full article is available to subscribers to the journal.
Author's Biography
Christian Måhrbeck started his career with Nordea Bank in 1997 as a financial adviser working directly with the clients. In 2004, he joined the asset management part of the business to support the implementation of a new front to back system from SimCorp. His first role was to implement constituent level benchmarks used for reporting to institutional clients, fund performance and investment guidelines. He became manager in late 2005 and included a cash management team along with the benchmark team under his management in 2007. In 2010, he took up a position as head of derivatives operations to support the new strategy of using derivatives to seek Alpha. This was a new team in asset management and it has been a journey, where they started up with 3 people and had grown to 12 people handling all the operational processes related to listed derivatives (being futures and options), over-the-counter (OTC), cleared OTC and collateral management.
Jørn Grønbech joined Nordea Asset Management (NAM) in 2017 as a senior derivatives specialist within derivatives operations department. Prior to joining NAM, Jørn spent 13 years in Nykredit Markets holding different roles by leading others in back- and middle-office functions related to derivatives and fixed income trade management, with a focus drive on change management. He also headed the paradigm transformation from an operational perspective in the ‘post-Lehman’ era. In NAM, he has been working with optimisation of processes, digitalisation and stakeholder management, including our outsourcing service provider. Jørn is also the driver of bilateral/cleared over-the-counter (OTC) as well as equity swaps.
