Credit Suisse plans tech cost-sharing with another bank
Credit Suisse is talking with an unnamed bank about a cost-sharing project around technology as it looks to make savings.
In an interview with the Financial Times, Tidjane Thiam, the bank’s chief executive, says its idea is at the “proof of concept” stage – and hints it may use an investor day in December to announce bigger money saving plans.
Credit Suisse has a three-year target of cutting $2 billion from last year’s “normalised” cost base, and getting it down to $19.3 billion.
The banking industry faces a number of challenges, such as regulation costs, stagnant revenues (not helped by all the new challengers), and a lack of major acquisitions. One solution may be in sharing the technology behind the scenes.
Thiam says: “If we have two servers and a bank has two servers and each one is not fully utilised, why can’t we share that capacity?”
He adds: “Often, when [banks] trade securities, we trade the same securities and we each have … those huge databases where we have a lot of information on securities. We could have that as a utility. So this is something we are definitely having conversations about.”
Earlier this year, Credit Suisse opted for FIS’s Derivatives Utility for its post-trade futures and cleared over-the-counter (OTC) derivatives operations and technology. If banks start sharing, some software vendors will win big. But there will be blood – as some will lose out.
Thiam is not a fan of small talk and says “we don’t like such conversations without purpose”. Credit Suisse is talking to “one specific bank” and it has asked the teams to come up with “one specific idea that we can implement successfully and take it from there”.