In two years, outsourced reconciliation solutions have grown exponentially as increased focus on risk, regulations, and cost reduction has heightened the need for greater transparency and efficiency across all areas of financial services operations. Discover how leading financial institutions are enhancing risk management and reducing costs through a global center of excellence for reconciliations.
In the last few years, the financial markets have undergone dramatic change. While some of this is down to natural evolution, much of the change can be directly attributed to new rules introduced in the wake of the 2007 crisis. Regulators, legislators and central bank governors have been determined to avert another bubble bursting or an unexpected event that could threaten markets. Lawmakers have targeted key financial practices for reform, radically altering the expectations and behavior of industry participants. The combination of the Dodd-Frank Act, European Markets Infrastructure Regulation (EMIR), MiFID ll and Basel lll signify the biggest regulatory change in decades. These reforms have resulted in major change to how financial products are traded, settled, collateralized and reported, resulting in deep and ongoing structural changes to the markets.
There is no doubt that these new rules are directly impacting buy-side firms — be they asset managers, hedge funds, insurance companies or pension funds. But while the changes have certainly brought challenges, they have also brought opportunities. Firms that can proactively evaluate structural and operational dislocations in the marketplace and tailor business models to leverage the opportunities while addressing the challenges will be in the best position to stand apart from their competitors. Revised business models call for revisions to supporting processes and systems. Buy-side firms should look to re-architect their processes and technology infrastructure, with a goal to strengthen risk control and oversight, enhance transparency and improve efficiency of front-to-back office control functions.
The credit crisis, and the regulatory response it spawned have fundamentally reshaped financial markets for buy-side firms. But while the changes have brought about challenges, they have also ushered in opportunities. The key to success will be the speed with which firms are able to understand the changing marketplace and adapt their business models to align with the changes.
In all of its forms, risk management is rapidly growing in importance within the commodity asset class. It will only become even more critical and complex in the future. Driven by unprecedented levels of change in the industry ranging from geopolitics to carbon, effective risk management is shifting for many commodity firms from just another activity to be managed to a critical component of business strategy that helps drive and inform brand, gain financing and trust, and demonstrates proper controls.
“Industrialization” of sourcing and procurement operationsGenpact Ltd
The sourcing and procurement function is increasingly mandated to contribute to the growth and agility necessary in these volatile and uncertain times. Its current operating models are, however, seldom able to deliver on these expectations—often lacking enough resources to tackle at scale emerging challenges, such as analyzing global and fragmented supply chain risks, as well as enabling frequent changes of company “perimeter” brought on by geographic expansion, M&A, and so on.
CCAR & DFAST: How to incorporate stress testing into banking operations + str...Grant Thornton LLP
Banks are integrating elements of regulatory stress testing into their everyday business processes and strategic planning exercises, and optimizing enterprise risk management in the process. What does enterprise wide stress testing mean for a financial institution? What are the impacts and implications to a financial institution?
The Fundamental Review of the Trading Book (FRTB) is a major challenge for the banking sector. This new Accenture Finance & Risk Services presentation explores the key implications of the new requirements and highlights key differences with previously published standards. Access this link for more information on FRTB: http://bit.ly/1NnY1RN
In the last few years, the financial markets have undergone dramatic change. While some of this is down to natural evolution, much of the change can be directly attributed to new rules introduced in the wake of the 2007 crisis. Regulators, legislators and central bank governors have been determined to avert another bubble bursting or an unexpected event that could threaten markets. Lawmakers have targeted key financial practices for reform, radically altering the expectations and behavior of industry participants. The combination of the Dodd-Frank Act, European Markets Infrastructure Regulation (EMIR), MiFID ll and Basel lll signify the biggest regulatory change in decades. These reforms have resulted in major change to how financial products are traded, settled, collateralized and reported, resulting in deep and ongoing structural changes to the markets.
There is no doubt that these new rules are directly impacting buy-side firms — be they asset managers, hedge funds, insurance companies or pension funds. But while the changes have certainly brought challenges, they have also brought opportunities. Firms that can proactively evaluate structural and operational dislocations in the marketplace and tailor business models to leverage the opportunities while addressing the challenges will be in the best position to stand apart from their competitors. Revised business models call for revisions to supporting processes and systems. Buy-side firms should look to re-architect their processes and technology infrastructure, with a goal to strengthen risk control and oversight, enhance transparency and improve efficiency of front-to-back office control functions.
The credit crisis, and the regulatory response it spawned have fundamentally reshaped financial markets for buy-side firms. But while the changes have brought about challenges, they have also ushered in opportunities. The key to success will be the speed with which firms are able to understand the changing marketplace and adapt their business models to align with the changes.
In all of its forms, risk management is rapidly growing in importance within the commodity asset class. It will only become even more critical and complex in the future. Driven by unprecedented levels of change in the industry ranging from geopolitics to carbon, effective risk management is shifting for many commodity firms from just another activity to be managed to a critical component of business strategy that helps drive and inform brand, gain financing and trust, and demonstrates proper controls.
“Industrialization” of sourcing and procurement operationsGenpact Ltd
The sourcing and procurement function is increasingly mandated to contribute to the growth and agility necessary in these volatile and uncertain times. Its current operating models are, however, seldom able to deliver on these expectations—often lacking enough resources to tackle at scale emerging challenges, such as analyzing global and fragmented supply chain risks, as well as enabling frequent changes of company “perimeter” brought on by geographic expansion, M&A, and so on.
CCAR & DFAST: How to incorporate stress testing into banking operations + str...Grant Thornton LLP
Banks are integrating elements of regulatory stress testing into their everyday business processes and strategic planning exercises, and optimizing enterprise risk management in the process. What does enterprise wide stress testing mean for a financial institution? What are the impacts and implications to a financial institution?
The Fundamental Review of the Trading Book (FRTB) is a major challenge for the banking sector. This new Accenture Finance & Risk Services presentation explores the key implications of the new requirements and highlights key differences with previously published standards. Access this link for more information on FRTB: http://bit.ly/1NnY1RN
Conduct Risk. Assessing risk and identifying cultural drivers for clear defin...Compliance Consultant
Conduct Risk is sweeping the financial services world and catching many risk manager out as there is still a lack of understanding.
Our Compliance Manual is available at http://bit.ly/ComplianceManualTemplate
Risk management need to determine the corporate risk philosophy and appetite. To assess or understand the risk philosophy, try to comprehend the organisation's culture, values and environment. The way business operations are conducted on a daily basis and the organisation’s strategy are typically good indicators where you can find the company risk philosophy. Assess whether business has an aggressive, innovative, typical or conservative attitude towards risks for achieving business goals.
Risk appetite is simply the amount of risk which the organisation is willing to take to undertake business activities and achieve the business objectives, where Conduct Risk is concerned this has to include good customer outcomes. A simple question to ask the board of members could be “What amount of reported mismanagement or public uproar would make you uncomfortable if it appeared in the business newspapers?”
Consolidate the various risk exposures from the risk department's identified risks and present them to the board. Finally, assess whether the company’s internal perception and rhetoric on risk philosophy and appetite are consistent with the board and other stakeholder's viewpoints. Realign the two where required to prepare the annual strategy.
Build Your Framework.
Risk Monitoring and Management Trends In CommoditiesCTRM Center
Commodity producers, traders, and industrial consumers are all facing a barrage of risks such as price exposure and cyber vulnerability, as well as legal, credit, operational and market risks. The risks associated with buying, selling, and moving commodities only seem to be increasing exponentially with greater regulatory oversight and a broadening of supply chain operational issues like traceability. Many of these risks can be business killers – the actions of rogue traders or the impact of counterparty business failures, for example – and lead to fatal damage such as an inability to access capital or damage to brands (via issues around sourcing commodities or producing substandard end-products). Other risks, such as ineffective price risk management, inefficient scheduling of transportation, or regulatory non-compliance can erode profitability and damage the company’s ability to execute on strategic plans and growth initiatives.
Of course, often where there is risk, there is also an opportunity to profit - but only when those risks are recognized, effectively managed, and properly mitigated. The rise in stakeholder scrutiny and regulatory oversight also means that being able to demonstrate effective risk management across the organization is certainly more important today than ever before.
Taking the road to advanced approaches and heightened standards in risk manag...Grant Thornton LLP
Develop and execute a roadmap to meet rising regulatory and stakeholder expectations. Banks of all sizes are required to build sophisticated analytical risk management capabilities in compliance with Dodd-Frank and other legislation making a priority of optimizing the deployment of capital and infusing objectivity into its allocation.
Third-party Governance and Risk Management - 2018Deloitte UK
This report shows how Third-party Risk Management had continued to benefit from greater executive awareness in 2017 which have allowed organisations to tackle the topic with a renewed focus and investment. This is even more important due to amid prevalent threats of high profile business failure, illegal third-party actions, or regulatory action with punitive fines.
Spotting the banana skins - avoiding FCA enforcement through better complianc...Bovill
Bovill - the UK financial services regulatory consultancy - runs regular briefings. These are the slides from the May briefing on FCA enforcement and compliance oversight. For more information visit www.bovill.com.
Further information on the event is below:
The FCA’s Risk Outlook last month sent a strong signal that the responsibility of compliance officers goes beyond ticking boxes. And enforcement action shows that increasingly individuals are held accountable.
But what does this mean practically for day to day governance and oversight? One way to spot the banana skins is to understand who’s slipped on them before.
The FCA has recently imposed significant personal fines on compliance officers and other approved persons for:
• Inadequate oversight of the implementation of a firm’s policies and procedures
• Failure to disclose a potential conflict of interest
• Failure to recognise the regulatory significance and have sufficient oversight of the firm’s overseas activities.
Bovill’s briefing explored effective oversight.
We looked at the FCA’s reasons for imposing these fines, and suggested ways of making sure your firm has sufficient oversight of its business –
helping you spot the banana skins before you slip up.
Accenture 2015 Global Structural Reform Study: Unlocking the Potential of Glo...Accenture Insurance
As they reshape the financial services industry in light of the 2007-2008 financial crisis, global regulators have introduced a series of structural reform regulations to help build resilience. Global Structural Reform (GSR) is creating a new financial services ecosystem for institutions.
Accenture’s 2015 Global Structural Reform Study finds senior management working to thrive in what amounts to an all-new financial services landscape. They are investing effort and funds in their response to GSR, but their focus is on meeting regulatory demands. While that represents a good starting point, our study finds institutions might be missing out when it comes to meeting the strategic implications of reform and using reform as an opportunity to reposition the organization for sustainable growth
Source-to-Pay: Advancing from Pure Cost Optimization to Value GenerationCognizant
The majority of businesses treat their sourcing, procurement and payment (S2P) processes as non-core functions. As a result, S2P does not receive the strategic or capital focus it deserves. By employing Cognizant's S2P Transformation Framework, global businesses can transform their S2P function from a mere support activity to a strategic business enabler that helps eliminate bottom-line erosion, increase competitive strength, and maintain the loyalty of customers and suppliers alike.
Eversheds Report - Streamlining for success: M&A Divestment and Separation Tr...Rafal Wasyluk
Sieć Eversheds opublikowała globalny raport pt. „Streamlining for success: M&A Divestment and Separation Trends". Raport koncentruje się na trendach w zakresie wyjść z inwestycji. Za koordynację polskich prac nad raportem odpowiedzialna była Ewa Szlachetka, partner kierujący praktyką fuzji i przejęć w kancelarii Wierzbowski Eversheds.
Na potrzeby raportu przeprowadzone zostało globalne badanie, również wśród klientów Eversheds. Jego celem było uzyskanie odpowiedzi m.in. na poniższe pytania:
Jakie aspekty separacji lub dezinwestycji oraz ogólnego procesu planowania są największym wyzwaniem?
Jakie są przykłady najlepszych praktyk i rozwiązań w zakresie radzenia sobie z tymi wyzwaniami?
Gdzie poszukiwać obszarów, w których można uzyskać wzrost wartości oraz gdzie można najwięcej stracić w procesie separacji?
Które kwestie prawne są krytyczne dla sukcesu transakcji?
Kiedy prawnicy wewnętrzni będą najbardziej skuteczni w swojej roli?
Jakie są najważniejsze zagadnienia dotyczące różnych grup interesariuszy, w tym zarządu, dyrektorów, zespołu zajmującego się rozwojem korporacyjnym i doradców prawnych?
W jaki sposób w trakcie zbycia chronić wartości zarówno w spółce dominującej, jak i zależnej?
Więcej (ENG): http://www.eversheds.com/global/en/what/services/m-and-a/report-2015.page
Basel III Is Here - What are the implications for your business? Infosys
This article focuses on the key requirements of the Basel III proposals. It highlights key issues uncovered during the financial crisis, delineates measures introduced to prevent the repeat of the issues, and outlines the impact on the financial industry and larger economy on the whole. The paper then takes a deep-dive into the impact of the new regulations on data and technology systems and the challenges firms face in re-engineering their data and IT systems. Finally, it offers a solution to these challenges.
The July 2015 Insight newsletter, discussing the changing regulatory landscape and including a conversation with Matthew Lynes, Senior Investment Manager at Aberdeen Asset Management
Next Generation Integrated Treasury and Trading for Energy and Commodity Comp...CTRM Center
Energy producers, traders and consumers today face a challenging trading environment with more regulatory oversight, lower prices, increasing costs and almost constant volatility. As a result forward thinking energy companies are already adopting a more closely integrated treasury and trading approach, a potentially overlooked opportunity by many. Typically, trading and treasury are separate areas of business with limited or no integration between them. The traders work to sell commodities at the best price or to profit from trading, while the treasury function with its concern over available cash, navigating future investments and doing so in the right currency and at the right location, has a range of responsibilities, including FX and IR hedging, broader credit management, debt and capital management and more. Usually, the treasury department gets a fixed time view of trading positions to work with and can miss opportunities to protect profits or control costs as a result as these exposures change rapidly. Even large oil and gas majors have experienced the situation where trading has a good month but FX rates moved against them to give an entirely different result. Despite believing that they were hedged, FX markets went against the company leaving it with significantly eroded traded profits.
Conversation with Matthew Lynes, Aberdeen Asset Management. Buy-Side System Requirements - Whitepaper by Quantifi and OTC Partners. The Cost of Collateral - Webinar Survey.
Conduct Risk. Assessing risk and identifying cultural drivers for clear defin...Compliance Consultant
Conduct Risk is sweeping the financial services world and catching many risk manager out as there is still a lack of understanding.
Our Compliance Manual is available at http://bit.ly/ComplianceManualTemplate
Risk management need to determine the corporate risk philosophy and appetite. To assess or understand the risk philosophy, try to comprehend the organisation's culture, values and environment. The way business operations are conducted on a daily basis and the organisation’s strategy are typically good indicators where you can find the company risk philosophy. Assess whether business has an aggressive, innovative, typical or conservative attitude towards risks for achieving business goals.
Risk appetite is simply the amount of risk which the organisation is willing to take to undertake business activities and achieve the business objectives, where Conduct Risk is concerned this has to include good customer outcomes. A simple question to ask the board of members could be “What amount of reported mismanagement or public uproar would make you uncomfortable if it appeared in the business newspapers?”
Consolidate the various risk exposures from the risk department's identified risks and present them to the board. Finally, assess whether the company’s internal perception and rhetoric on risk philosophy and appetite are consistent with the board and other stakeholder's viewpoints. Realign the two where required to prepare the annual strategy.
Build Your Framework.
Risk Monitoring and Management Trends In CommoditiesCTRM Center
Commodity producers, traders, and industrial consumers are all facing a barrage of risks such as price exposure and cyber vulnerability, as well as legal, credit, operational and market risks. The risks associated with buying, selling, and moving commodities only seem to be increasing exponentially with greater regulatory oversight and a broadening of supply chain operational issues like traceability. Many of these risks can be business killers – the actions of rogue traders or the impact of counterparty business failures, for example – and lead to fatal damage such as an inability to access capital or damage to brands (via issues around sourcing commodities or producing substandard end-products). Other risks, such as ineffective price risk management, inefficient scheduling of transportation, or regulatory non-compliance can erode profitability and damage the company’s ability to execute on strategic plans and growth initiatives.
Of course, often where there is risk, there is also an opportunity to profit - but only when those risks are recognized, effectively managed, and properly mitigated. The rise in stakeholder scrutiny and regulatory oversight also means that being able to demonstrate effective risk management across the organization is certainly more important today than ever before.
Taking the road to advanced approaches and heightened standards in risk manag...Grant Thornton LLP
Develop and execute a roadmap to meet rising regulatory and stakeholder expectations. Banks of all sizes are required to build sophisticated analytical risk management capabilities in compliance with Dodd-Frank and other legislation making a priority of optimizing the deployment of capital and infusing objectivity into its allocation.
Third-party Governance and Risk Management - 2018Deloitte UK
This report shows how Third-party Risk Management had continued to benefit from greater executive awareness in 2017 which have allowed organisations to tackle the topic with a renewed focus and investment. This is even more important due to amid prevalent threats of high profile business failure, illegal third-party actions, or regulatory action with punitive fines.
Spotting the banana skins - avoiding FCA enforcement through better complianc...Bovill
Bovill - the UK financial services regulatory consultancy - runs regular briefings. These are the slides from the May briefing on FCA enforcement and compliance oversight. For more information visit www.bovill.com.
Further information on the event is below:
The FCA’s Risk Outlook last month sent a strong signal that the responsibility of compliance officers goes beyond ticking boxes. And enforcement action shows that increasingly individuals are held accountable.
But what does this mean practically for day to day governance and oversight? One way to spot the banana skins is to understand who’s slipped on them before.
The FCA has recently imposed significant personal fines on compliance officers and other approved persons for:
• Inadequate oversight of the implementation of a firm’s policies and procedures
• Failure to disclose a potential conflict of interest
• Failure to recognise the regulatory significance and have sufficient oversight of the firm’s overseas activities.
Bovill’s briefing explored effective oversight.
We looked at the FCA’s reasons for imposing these fines, and suggested ways of making sure your firm has sufficient oversight of its business –
helping you spot the banana skins before you slip up.
Accenture 2015 Global Structural Reform Study: Unlocking the Potential of Glo...Accenture Insurance
As they reshape the financial services industry in light of the 2007-2008 financial crisis, global regulators have introduced a series of structural reform regulations to help build resilience. Global Structural Reform (GSR) is creating a new financial services ecosystem for institutions.
Accenture’s 2015 Global Structural Reform Study finds senior management working to thrive in what amounts to an all-new financial services landscape. They are investing effort and funds in their response to GSR, but their focus is on meeting regulatory demands. While that represents a good starting point, our study finds institutions might be missing out when it comes to meeting the strategic implications of reform and using reform as an opportunity to reposition the organization for sustainable growth
Source-to-Pay: Advancing from Pure Cost Optimization to Value GenerationCognizant
The majority of businesses treat their sourcing, procurement and payment (S2P) processes as non-core functions. As a result, S2P does not receive the strategic or capital focus it deserves. By employing Cognizant's S2P Transformation Framework, global businesses can transform their S2P function from a mere support activity to a strategic business enabler that helps eliminate bottom-line erosion, increase competitive strength, and maintain the loyalty of customers and suppliers alike.
Eversheds Report - Streamlining for success: M&A Divestment and Separation Tr...Rafal Wasyluk
Sieć Eversheds opublikowała globalny raport pt. „Streamlining for success: M&A Divestment and Separation Trends". Raport koncentruje się na trendach w zakresie wyjść z inwestycji. Za koordynację polskich prac nad raportem odpowiedzialna była Ewa Szlachetka, partner kierujący praktyką fuzji i przejęć w kancelarii Wierzbowski Eversheds.
Na potrzeby raportu przeprowadzone zostało globalne badanie, również wśród klientów Eversheds. Jego celem było uzyskanie odpowiedzi m.in. na poniższe pytania:
Jakie aspekty separacji lub dezinwestycji oraz ogólnego procesu planowania są największym wyzwaniem?
Jakie są przykłady najlepszych praktyk i rozwiązań w zakresie radzenia sobie z tymi wyzwaniami?
Gdzie poszukiwać obszarów, w których można uzyskać wzrost wartości oraz gdzie można najwięcej stracić w procesie separacji?
Które kwestie prawne są krytyczne dla sukcesu transakcji?
Kiedy prawnicy wewnętrzni będą najbardziej skuteczni w swojej roli?
Jakie są najważniejsze zagadnienia dotyczące różnych grup interesariuszy, w tym zarządu, dyrektorów, zespołu zajmującego się rozwojem korporacyjnym i doradców prawnych?
W jaki sposób w trakcie zbycia chronić wartości zarówno w spółce dominującej, jak i zależnej?
Więcej (ENG): http://www.eversheds.com/global/en/what/services/m-and-a/report-2015.page
Basel III Is Here - What are the implications for your business? Infosys
This article focuses on the key requirements of the Basel III proposals. It highlights key issues uncovered during the financial crisis, delineates measures introduced to prevent the repeat of the issues, and outlines the impact on the financial industry and larger economy on the whole. The paper then takes a deep-dive into the impact of the new regulations on data and technology systems and the challenges firms face in re-engineering their data and IT systems. Finally, it offers a solution to these challenges.
The July 2015 Insight newsletter, discussing the changing regulatory landscape and including a conversation with Matthew Lynes, Senior Investment Manager at Aberdeen Asset Management
Next Generation Integrated Treasury and Trading for Energy and Commodity Comp...CTRM Center
Energy producers, traders and consumers today face a challenging trading environment with more regulatory oversight, lower prices, increasing costs and almost constant volatility. As a result forward thinking energy companies are already adopting a more closely integrated treasury and trading approach, a potentially overlooked opportunity by many. Typically, trading and treasury are separate areas of business with limited or no integration between them. The traders work to sell commodities at the best price or to profit from trading, while the treasury function with its concern over available cash, navigating future investments and doing so in the right currency and at the right location, has a range of responsibilities, including FX and IR hedging, broader credit management, debt and capital management and more. Usually, the treasury department gets a fixed time view of trading positions to work with and can miss opportunities to protect profits or control costs as a result as these exposures change rapidly. Even large oil and gas majors have experienced the situation where trading has a good month but FX rates moved against them to give an entirely different result. Despite believing that they were hedged, FX markets went against the company leaving it with significantly eroded traded profits.
Conversation with Matthew Lynes, Aberdeen Asset Management. Buy-Side System Requirements - Whitepaper by Quantifi and OTC Partners. The Cost of Collateral - Webinar Survey.
Value Study: Investing in ETRM / CTRM in Turbulent TimesCTRM Center
The only constant is change echoes an astute observation by the Greek philosopher, Heraclitus, some 2,500 years ago. Those of us who are engaged in the world of commodities are continually reminded of the accuracy of his observation, particularly recently, as commodity prices collapsed led by crude oil. In fact, our industry is continually impacted by changes in the regulatory environment, supply/demand balance, global economic environment, technology developments, political intervention and more.
Recently, BP noted in its annual Energy Outlook1, “Today’s turbulence is a return to business-as-usual. Continuous change is the norm in our industry. The energy mix changes. The balance of demand shifts. New sources of energy emerge, such as shale gas, tight oil, ultra-deepwater oil or renewables. Economies expand and contract. Energy production and consumption are affected by disruptions, from wars to extreme weather. New policies are created to address climate change or bolster energy security.“
Broadridge Multi Asset Class Conundrum WhitepaperBroadridge
As trading across multiple asset classes increases, operating in silos is no longer
an effective strategy for optimizing operations, mitigating risk and capitalizing
on market opportunities. In less than ten years, multi-asset class trading has exploded, as buy- and sell-side firms utilize an increasingly broad array of investment strategies to improve performance and exceed their peers. This diversification has occurred across both asset segments and geographies, as financial firms seek out new opportunities for growth.
In a decade of low interest rates, regulatory change and cost-reduction mandates, the growth in trading of alternative assets has been a response by many firms, including those in traditional equities and debt markets, to improve returns. This is also reflected, for example, in the quadrupling volume of futures and options contracts traded from 2003 to 2011.
Forward-Looking Practices in Wealth ManagementCognizant
To keep up with growing regulations in wealth management sector, firms need to future-proof their operations with a robust risk-control system and transparent trading practices.
Accenture 2015 Global Structural Reform Studyaccenture
Accenture’s 2015 Global Structural Reform Study – based on a survey of 131 banking, insurance and capital markets institutions across regions – confirms that, while institutions are investing in their response to Global Structural Reform (GSR), their plans still appear focused on meeting regulatory demands alone, rather than accounting for the more strategic implications of structural reform.
Highlights from the study's conclusions include:
- GSR is re-writing the financial services landscape
- Investment is clear, but strategy less so
- Three suggested principles for unlocking the potential of GSR
Download the report and visit https://www.accenture.com/accenture-2015-global-structural-reform-study.aspx to learn more.
Research: How To Manage Regulatory Compliance Conor Coughlan
This is a special report based on the latest market research relating to how your peers and other market players are addressing regulatory compliance and the management of regulatory data.
Specifically this report outlines the markets reaction to:
- MiFID II
- Solvency II
- Basel
- AIFMD
- CRD
- IFRS
- EMIR
- Volcker and many more regulations.
The survey included practitioners from Asset Management, Wealth Management, Insurance, Banking and other FS entities.
Change has always been a constant in the financial industry but the recent financial crisis triggered an unprecedented rise in that rate of change. Today, increased regulation, greater demands for transparency, and new business channels require financial institutions to constantly be in reactive mode.
Financial institution executives realize the increasing pace of change is not temporary. They understand that this is a “new normal” that they must plan and prepare for. And they know that proactively developing a sound strategy for dealing with constant change begins with an honest look at the institution’s ability to deal with change.
The only way to improve change capacity is to build a strong foundation based in technology that is specifically designed to manage constant transformation.
Big Data in the Fund Industry: From Descriptive to Prescriptive Data AnalyticsBroadridge
NICSA’s Technology Committee, including Dan Cwenar, President, Access Data, Broadridge, offer perspectives on the “state of play” of Big Data in the fund industry:
The history of “ Big Data”
The definition of Big Data in the context of industry applications.
The movement from descriptive towards prescriptive analytics in driving decisions
Common misconceptions about the use of predictive analytics.
FATCA Compliance: Riding a Roller Coaster of Regulatory ChangeBroadridge
FATCA will impose new due diligence, withholding, and reporting requirements on financial institutions. This paper outlines the significant regulatory change FATCA brings to provide the IRS with an increased ability to detect U.S. tax evaders—specifically, those among U.S. “persons” (individuals or entities) who maintain foreign accounts and investments either directly or indirectly, through their ownership in foreign entities.
A guide to help advisors understand the proposed Department of Labor changes to the fiduciary definition regulations.
The DOL’s proposed changes to the fiduciary definition regulations are causing financial advisors to re-examine their business models and to determine whether they may be a fiduciary to the plan and participants under the proposed regulations. These proposed changes will not only impact qualified retirement plans, but non-qualified plans too, such as IRAs. There could be major implications for how advisors will work with IRAs if these changes are implemented. This Practice Guide provides a framework to help advisors understand this issue by addressing the following questions:
What are the rules today?
What is being proposed?
How would some of the proposed changes impact an advisor’s practice?
Are there any action steps an advisor can take today in anticipation of the new rules?
The availability of electronic solutions, the regulatory framework within which to offer them and an increasing investor appetite for digital information has created new opportunities in investor communications. Today, companies can provide information to investors when, where, and how they want it – and that makes for more engaged investors.
That’s never been more important. as governance, transparency and accountability in capital markets become more closely scrutinized and more rigorously measured, engaging investors, encouraging voter participation and demonstrating leading communication practices is vital.
ERISA Fiduciary Issues: A Guide for AdvisorsBroadridge
The role, expectations and legal requirements for ERISA fiduciary advisors is changing. Plan sponsors are increasingly looking to retirement plan advisors for guidance. This brings potential business opportunities but also more regulatory scrutiny. This paper provides advisors with guidelines to understand the plan sponsor role as fiduciaries and the steps to take to avoid breaching their duties.
Managing Big Data: A Big Problem for BrokeragesBroadridge
Reliable mutual fund invoicing and analysis has been challenging the industry for years due to the regulatory environment and other factors, and in this report we explore key concerns, current approaches, and the way forward. Based on in-depth interviews with financial services executives, this paper uncovered the significance of a data management and analytical challenge facing brokerages, which has led to lost revenue, increased compliance and reputational risk, and lost sales opportunities.
The Multi-Asset Class Conundrum: Solving Post-Trade Complexities Across Busin...Broadridge
As trading across multiple asset classes increases, operating in silos is no longer an effective strategy for optimizing post-trade efficiency, mitigating risk and capitalizing on market opportunities. This paper uncovers how leading firms are consolidating their operations, data and technology infrastructures to create a center of excellence for multi-asset post-trade processing.
Fee and Commission Management in Global MarketsBroadridge
Look at key trends, challenges and solutions in fee and commission management. The challenge for any global financial institution is the sheer complexity and number of relationships and fees. The ongoing financial crisis has intensified the need for transparency and risk reduction. Explore the potential benefits of automation of commission and fees management and consider ways to quantify costs savings and other gains.
Global Investing: Considerations for Building an End-to-End SolutionBroadridge
US clients are missing out on 90% of the world’s investment opportunities. Traditionally, firms have faced cost, complexity, and time-to-market hurdles when considering how to offer foreign securities to their clients. The paper defines the critical capabilities brokerage firms need to support international investing and provides best practices and a questionnaire to help design a roadmap for global expansion.
The New Hedge Fund-Prime Broker RelationshipBroadridge
The financial crisis has changed the relationship between hedge funds and prime brokers. With the default of some leading providers, funds have realized that they should diversify their prime broker relationships and require more transparency on operational processes of prime providers. However, as the funds industry regains momentum, they are looking to their prime brokers to provide services that will support business expansion. Hence, prime brokers need to adapt their offering and IT infrastructure to respond to the changing market.
Transforming Customer Engagements in a Digital WorldBroadridge
Financial services companies must adapt to new communications channels as customers are more connected than ever and expect companies they do business with to cater to their preferences. Businesses must move beyond focusing on marketing channels as silos and now consider how channels and devices need to connect across the full customer experience.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
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Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
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Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
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Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
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At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
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ENTREPRENEURSHIP TRAINING.ppt for graduating class (1).ppt
Rethinking Reconciliation: How a Global Center of Excellence Can Enhance Risk Management & Reduce Costs
1. How a global center of excellence can enhance risk
management and reduce costs
Rethinking
reconciliation
2. RETHINKING RECONCILIATION
Overview
Are your managers spending too much time
and resources collecting and reconciling
data, and not enough evaluating information,
optimizing operations and mitigating risk?
Reconciling activity requires financial services
firms to overcome the challenge of managing
across an expanding set of asset classes,
currencies, business entities and markets. As
regulatory demands increase, so does the cost of
falling further behind the industry standard for a
reconciliation center of excellence.
Reconciliation processes have historically been
inconsistent and embedded within different
entities creating ad-hoc, manually intensive and
non-standard silos, often using spreadsheets
or inhouse grown solutions. These processes
have evolved incrementally due to: 1) the
interdependencies involved in system expansions
and integrations; 2) cost constraints; and
3) speed-to-market pressures.
The “path of least resistance” has been to
maintain one-off reconciliations, rather than
allocate the time and resources to implement
scalable best-in-class solutions.
The need for change is being driven by:
• Increased and more complex regulatory
requirements – such as Basel III and Dodd-Frank
• Pressure to optimize firm capital, including
increased collateral requirements and the
repercussions associated with inaccurate or
out-of-date books and records
• The cost of maintaining multiple IT applications
and inconsistent processes
• The challenges of managing global and product
expansion in a real-time manner
These changes require increased reconciliation
staff expertise, as well as proven industry-leading
technologies. In ways we will explain, the weight
of combined pressures is forcing firms to consider
an alternative path – leveraging a service partner
to manage reconciliation centers of excellence for
labor and technology.
Key Factors Driving the
Need for Change
1. New Regulations Increase Compliance and
Risk Management Focus
Repercussions from the 2008 financial crisis
have increased regulatory requirements around
the globe including Dodd-Frank in the U.S., the
European Market Infrastructure Regulation
(EMIR), and Basel III globally (see box below).
The risks and implications created by
reconciliation errors, imbalances of books and
records, overdrafts or trade fails elevate the need
for seamless risk management and world-class
reconciliation performance. Risk reduction is
now viewed as a “critically important” driver of
reconciliation processes by 75% of Tier 1 banks.
Regulatory compliance is a strong second, cited
by 59% (see Exhibit 1).
Basel III – A Comprehensive Global Risk
Management Standard
The accord known as Basel III, adopted
in 2010-11, is a model for a new era in global
risk management standards. It calls for
more stringent reform measures on capital
and liquidity requirements, e.g., global
liquidity coverage. By reducing leverage
limits, Basel requires financial firms to
further optimize and more actively manage
collateral and capital around the clock to
avoid additional costs.
One of the ways to face these capital,
collateral and liquidity pressures is to
create standardized, real-time reconciliation
processes to ensure your books and
records are promptly and fully balanced.
Reconciliation tools will also need to
have mark-to-market capabilities, and the
ability to convert currencies and create
centralized reporting with risk alerts in a
real-time manner.
3. 2
RETHINKING RECONCILIATION
As most financial firms will not be able to pass
the costs created by these new regulations
through to clients, sell-side and buy-side
firms are increasingly motivated to partner
with technology and labor service providers.
Historically, financial services firms have primarily
outsourced non-differentiating functions for cost
savings. However, the BPO industry has evolved
enabling firms to leverage industry expertise
and operational best practices without diverting
investment dollars from areas that generate
competitive advantage.
2. Automation Addresses Globalization
Requirements and Risk
Financial services firms operate in global markets
around the clock, driving demand for multi-entity
reconciliation functions. Firms are challenged to
clear, reconcile and settle trades in real time and
report and correct any problems quickly. Sell-
side and buy-side firms trading globally face the
additional risks of currency conversion, capital
charges, execution delays and mark-to-market
requirements.
Additionally, as a result of the 2008 financial
crisis, buy-side firms are increasingly faced with
reconciling more diverse information sets while
avoiding costly errors and optimizing collateral.
These firms are also spreading trading and
collateral across multiple prime brokers, CCPs and
custodians, significantly increasing the importance
and complexity of reconciliation processes for buy-
side firms.
As global securities markets never sleep, risk
managers must respond faster by focusing less
on gathering information and more on evaluating
risk “hot spots” and understanding trends
quickly, wherever and whenever they emerge.
Reconciliation systems must be able to adjust for
local market nuances quickly and cost-effectively.
Automated reconciliation services have become a
key to managing and prioritizing counterparty risk,
managing capital, meeting deadlines, optimizing
collateral and reducing associated costs.
3. Expansion of Investment Instruments and
Trading Volumes Force Modernization
Trading volumes have increased across many
instruments and asset classes – especially
derivatives, foreign currencies and fixed income
– in part due to the growth of high-frequency
trading (HFT). New regulations are expected to
increase trading volume and transparency in the
OTC derivatives market, which in turn will impact
liquidity and increase collateral requirements.
Operations areas will also continue to face
increased workloads and other demands while
facing pressures to reduce costs and improve
processing service levels, often without the
necessary investment funding.
EXHIBIT 1
A Market Refocused on Risk Management
and Regulatory Compliance
1 = Critically Important
N = 65
2 = Important
3 = Relatively Unimportant 4 = Not Important at All
0%
20%
40%
60%
80%
Process
Integrity
Risk
Reduction
Cost
Reduction
Regulatory
Compliance
Streamline/
Simplify
Systems
53%
6%
41%
75%
24%
1%
29%
60%
9%
59%
32%
9%
25%
68%
7%
Source: TowerGroup Global Survey of Tier 1 Banks’
Reconciliation Practices, May 2011
Number of End-User Sites: 2006 vs. 2011
Automated reconciliation has historically been an example of
high adoption rates of third-party solutions.
• The most critical reasons that leading FSIs are moving toward
centralization of reconciliation are risk reduction, regulatory
compliance, and cost reduction.
• These factors serve as a proxy for the overall concerns COOs
and CTOs are articulating about the highly risk-sensitive
environment in which their institutions are operating.
2006 2011
Net Increase of 12% in
New Reported Client Sites
All Vendors
2,576
2,890
4. 3
RETHINKING RECONCILIATION
Investment Management Sales at Broadridge
Investment Management Solutions, says
“Engaging a leading financial technology and BPO
provider reduces the time needed to consolidate
and match data, affording the flexibility and ability
to handle growing trade volumes and providing a
broad view of their risks and opportunities to new
initiatives, instruments and markets.”
4. Labor Cost Pressures Prompt the Need for
Operational Efficiency
Reconciliation activities account for about 30-40%
of firms’ total back-office labor costs, and the vast
majority of this cost cannot be passed through
to customers. The pressure to reduce back-office
costs and keep them aligned with firm revenues
has fallen heavily on operations departments.
Adopting a centralized reconciliation function
and partnering with an industry-leading service
provider for time-consuming manual reconciliation
tasks helps financial services firms achieve
significant cost savings, while also increasing
speed of information and accuracy.
In Summary: Given the continued pace of new
regulations, increased risk management focus
and global market expansion, financial services
firms recognize that adding new reconciliations
incrementally within silos is not a cost-efficient
way to achieve enterprise goals. Since many
reconciliation processes are performed on-demand
or with high frequency, firms also face a transition
risk in implementing changes.
A “Paradigm Shift” – Centralized
Reconciliation Outsourcing Solution
Centralization of reconciliations through an
outsourcing provider is the next evolution for
our industry. The combination of BPO solutions
with industry-leading technology enables these
providers to deliver scale and efficiency benefits.
Centralization can range from a global hub to
smaller units, all providing standardization across
business lines. BPO reconciliation functions can
be implemented quickly and cost-effectively,
with minimal expenditure, by firms on both the
buy- and sell-sides. They offer 24/7 access to
data with standardized global risk-management
processes, increased flexibility to respond to local
markets requirements and reliable operational
best-practices. Furthermore, BPO providers often
reduce exception rates in excess of 25% while
offering best-in-class Service Level Agreements
and ongoing investments.
A multi-currency global reconciliation outsourcing
strategy across the front, middle and back offices
and all layers of a firm and its strategic partners
(affiliates, custodians, counterparties, etc.)
increases straight-through processing (STP) rates
while eliminating manual steps, input errors
and labor-intensive silos. These functions can
frequently accelerate the speed to market for
new products, services and regulatory changes
offsetting expanding cost pressures on capital,
liquidity and collateral.
By reducing firms’ FTE staff costs and capital
commitments for new technologies, the
centralized functions also increase flexibility to
reallocate investment dollars to your firm’s core
differentiating services. With experienced global
reconciliation staff in place, a flexible BPO process
retains expertise and leverages it to quickly expand
“ Centralized reconciliation functions represent
a paradigm shift for the industry. Historically,
financial firms spend 30-40% of back-office
costs gathering and preparing information as
part of disconnected reconciliation processes.
Partnering with an industry reconciliation
leader can leverage global centers of excellence
to create standardized risk management
processes. This increases firms’ ability and
agility to enter new global markets, expand
products, and comply with more complex
regulations while significantly reducing costs
and risks.”
Michael Alexander, President
Broadridge Business Process Outsourcing Solutions
5. 4
RETHINKING RECONCILIATION
into new opportunities – markets, currency, asset
classes, etc.
Today’s state-of-the-art BPO reconciliation
solutions employ versatile, powerful and
multifaceted technologies with the power to
quickly enable any kind of reconciliation for
any type of global asset, currency or financial
institution. The reconciliation function can also
flag and resolve exceptions based on customizable
business rules, improving the ability to identify
and minimize risk exposures while responding
rapidly and cost-effectively with sensitivity for
local market regulations and business-model
nuances.
Finally, they can address a high priority of many
financial services firms: providing automated and
centralized risk management across reconciliation
processes enterprise-wide to help diverse financial
firms identify, evaluate and remedy common and
costly exception patterns in real time.
BPO Reconciliation
Adaption Accelerated
Utilization of BPO reconciliation services is
expected to rise by 350% over the next
18 months.
Tier 1 Banks have already heightened their
reconciliation focus by adopting third-party
reconciliation services. According to a Tower
Group survey in 2011, only 2% of respondents had
already implemented full reconciliation services.
Over the next 18 months, respondents indicate
that the adoption of outsourced reconciliation
solutions will grow by 350% (see Exhibit 2).
In choosing a BPO provider, financial services
firms should require proven experience in
implementing reconciliation solutions onschedule
and on-budget. The chosen provider should
also have a deep pool of talent to help clients
make transitions or expand systems. The goal
is to partner with a provider that can help your
firm design and implement an industry-leading
reconciliation utility, fully integrated with your
core software and processes, onbudget and within
a defined period of time.
Achieving Centralization in
Four Steps: Technology &
Operations, Expertise, Risk
and Cost
As cost pressures and regulatory requirements
continue to rise, financial firms should assess their
current reconciliation capabilities across four key
areas: Technology & Operations, Expertise, Risk
and Cost.
Step 1: Develop a Roadmap of Centralized
Reconciliation Functions
Technology and operations provide the critical
foundation for supporting enterprise-wide
reconciliation transparency. Firms should also
assess their current or planned capabilities to
identify processing gaps that increase risks to
the firm.
EXHIBIT 2
BPO Reconciliation is Accelerating
N = 65
Today (March 2011) Planned in the Next 18 Months
(by September 2012)
Source: Tower Group Global Survey of Tier 1 Banks’
Reconciliation Practices, May 2011.
Service-oriented architecture will be used for managed
reconciliations solutions along the spectrum from simple
matching to data acquisition to exception identification.
• That firms are overcoming their suspicion of solutions “not
invented here” is demonstrated by the 42% of FSIs who plan
on moving to vendor reconciliations solutions over the next
18 months.
FSIs are Teaming with Providers that have
Deep Domain Expertise and Proven Solutions
BPM/BPO
Full
Outsource
Vendor
SaaS/ASP
Vendor
Hosted
Internally
Hosted
Vendor
Software
Package
0%
20%
30%
40%
50%
10%
Custom
Software
36%
31%
34%
42%
19%
13%
350%
Growth
2%
7%
3%
2%
6%6%
6. 5
RETHINKING RECONCILIATION
Reconciliation technology and operations must
seamlessly handle inbound and outbound data
mapping, matching and exception management
across all global asset classes, with the business
intelligence to provide value in new ways – by
improving risk management and by enabling the
optimization of business relationships.
Self-assessment: Technology & Operations
Key questions firms should ask themselves to
evaluate their reconciliation technology and
operations are:
• Does our reconciliation model enable our
firm to achieve a high level of control and risk
management?
• Do we currently have the agility to rapidly
support new regulations with the scalability and
flexibility to expand into new markets and asset
classes or introduce new counterparties?
• Can we handle the specific exception
management processing requirements for all
our needs, globally?
• Does our reconciliation technology integrate
easily into other critical systems and vendor
technologies while fitting into our future
architecture?
• Do our reconciliation technology and operations
support the needs of our expanding global
business community?
• Can we provide operational support in multiple
local time zones, or do our global offices operate
in silos?
• Are we able to consistently reduce our
exceptions by 15-20% each year?
Step 2: Evaluate Your Firm’s Expertise
Reconciliation and exception management
require a seasoned staff with strong domain
knowledge, including the ability to evaluate
and adopt the industry’s best practices across
business units.
Self-assessment: Expertise
Key questions firms should ask themselves in
evaluating their reconciliation expertise are:
• Does our staff have the specialized
reconciliation knowledge and experience to
support all of our global businesses, products,
markets, and currencies?
• Is our team aware of best in class reconciliation
practices and experienced in evaluating and
implementing them?
• Does our operating model support continued
expertise development in the reconciliation
domain to meet changing regulations?
• Can we operate around the clock and respond
to volume peaks and troughs across global
products and markets?
• Do we have the staff to oversee the enterprise
reconciliation processes and understand gaps in
the business process?
Step 3: Evaluate Your Operational Risk
Management
A consolidated reconciliation function can be
the key to enhanced risk management by: 1)
identifying potential exposures before they occur;
and 2) providing the expertise to appropriately
respond to exceptions and issues, before they
escalate costs and risks.
Self-assessment: Risk
Key questions firms should ask themselves in
evaluating their risk management effectiveness:
• Do our reconciliation capabilities and
measurements adequately allow us to monitor
operational and counterparty risk in real-time
around the globe?
• Does our reconciliation technology provide the
scalability required to meet compliance and
regulatory commands?
• Will our firm be exposed to increased
operational risk if key reconciliation staff
members unexpectedly leave the firm? Do we
have a contingency plan in place?
• Can our reconciliation capabilities handle the
specific processing requirements of all of our
business needs and report global activity in
clients’ preferred currency?
• Could we reduce our risk exposure by
reevaluating our operating model?
7. 6
RETHINKING RECONCILIATION
• Are we able to properly age open items and
identify trends and conduct causal analysis in a
systemic manner?
• Are we able to mark to market our open
reconciliation items in a multi-currency manner?
Step 4: Assess Your Operating Costs
As operating expense pressures continue to
mount, financial firms must continue enhancing
reconciliation while achieving cost savings and
conserving capital.
Self-assessment: Operating Cost
Key questions firms should ask themselves
in evaluating the cost of supporting their
reconciliation capabilities are:
• Are we able to reduce costs in excess of 30%
and minimize ongoing investments while
continuing to optimize capabilities without
reducing service and risk?
• How much time and money are we spending on
reconciliations and do we have a front-to-back
office technology and operations strategy that
keeps costs manageable?
• Can we reduce operating costs by reevaluating
our operating model?
• Do we have the resources to support new
products and regulatory requirements in a cost
effective manner?
• Can we reduce our fixed costs tied to supporting
our reconciliation capabilities and move to a
variable cost model that allows costs to fluctuate
with our volumes?
• Are technology maintenance and development
costs undermining our reconciliation footprint
expansion ability?
Conclusion
Engaging a reconciliation service provider
is becoming the “new normal” for achieving
industry-leading reconciliation.
The benefits of working with an experienced
service provider have evolved beyond cost-savings
to include expertise and best practices without
the costs of capital investments or staff expansion
and expertise. The optimal partnership offers
greater control and process standardization
while enabling financial services firms to focus
on current business needs including increased
regulations, risk management requirements
and cost pressures. As a result, leading firms are
embracing the outsourcing of their reconciliation
operations and technologies to attain the
operational efficiency and transparency provided
by a state-of-the-art utility.
Firms should select a reconciliation solution
that is expandable – capable of enabling the
addition of new reconciliation and global trading
instruments and volume, in response to emerging
issues and opportunities.
Finding the right partner in this area is essential
to achieving the end-to-end operational controls
your firm needs to grow business, reduce
operational risk and realize cost savings. Be sure
to seek a partner with proven functional expertise
and deep understanding of your business based
on an in-depth assessment, plus the flexibility to
operate within your environment.
This is where Broadridge comes in.