Outsourcing services in a challenging time

Christian Måhrbeck and Jørn Grønbech
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Christian Måhrbeck: Head of Derivatives Operations, Nordea Asset Management, Denmark
Jørn Grønbech: Senior Specialist in Derivatives Operations, Nordea Asset Management, Denmark

Journal of Securities Operations & Custody, 2021, vol. 13, issue 4, 365-373

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 (search for similar items in EconPapers)
JEL-codes: E5 G2 K22 (search for similar items in EconPapers)
Date: 2021
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