Taking care of business
The financial crisis of 2007/8 hit some companies very hard, very quickly; some seem to have thrived, but many, if not most, will have felt a delayed shock and been faced with some hard decisions in the succeeding years.
That was certainly the experience of Dublin-based Information Mosaic, says chief marketing officer and commercial director, Paul Fox( right). With a string of client projects in flight, the immediate effects of the crisis weren’t a problem, but as projects that had run for two or more years started coming to an end, things got a little tougher.
Fortunately, the company has one major shareholder that has both funds and a long-term view: SEB, the family-owned Scandinavian banking group.
Over the intervening years, the company has transformed itself from being a specialist in corporate actions processing, to a much wider post-trade offering covering asset management, wealth management, custodians and market infrastructure.
Risk and business analytics are at the heart of the software offerings in these areas, but it is in the business relationships that it forges with clients that Fox says the company’s strength lies – a product of the corporate mind-set that helped it through the post-crisis period.
“Our background is engineering, but we are not making a technology sale,” he says. “Our engagement model is to work with the client on the business case – and we won’t sign long-term contracts with anyone without knowing and understanding their business.”
The company has a set process for client engagement, which Fox says comes back to saying: “We want new clients, of course – my job is to make sure that they are the right ones. Just as the client goes back to his investment committee to get funding, we ask ourselves, ‘can we give this guy a business result?’ We want to work with clients – and we have strong references from existing clients – so we are saying, ‘if you are not up for this approach, that’s fine – talk to someone else’. We’re small, we’re specialist and the last thing we need is a failed project.”
The company has a more formal approach, of course, in the form of IMValue, its business value framework, described as translating “the traditionally intangible concept of operational excellence into tangible results” by distilling the experience it has gained with customers over the years into a set of analytics and key performance indicators. The intention is to work with clients to “achieve their business goals rather than recreate their current environment”.
In the industry of today, Fox says that close collaboration between institutions and suppliers is essential to success. “If you look at the state of play in securities processing, firms need to achieve a 30-40% reduction in operating costs – that’s going to mean a fundamental change in approach,” he says.
One such change he sees is a change in attitude to legacy systems – previously most have shied away from dealing with the problem. “There are a lot of PL/1 and Cobol-based systems out there still – some people are looking at 80-100 systems and they are starting to say to themselves, ‘it would be easier to just replace all this’,” he says.
Not all that easy, of course, but he argues that as well as a new realism in the face of the scale of the cost reduction required, industry-wide changes are starting to bear fruit, particularly in the standardisation area.
“Standardising global securities processing, not building unique systems, is the way things are heading, whether you are a two-man team in Estonia or a market infrastructure, it’s the same,” he says.