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| Hi-tech route to regulation
| MARK BIRKINSHAW
Managing director, Datatech |
The finance industry in Jersey, as in many other jurisdictions, has been forced into wholesale and dramatic change over the past few years, brought about by significant increases in regulatory compliance processes and controls required to convince the wider world that the Island is a safe place to do business.
While there has been a great deal of negative press about increased regulation and its effect on the industry, there have also been many positives to come out of the last few years. Organisations have been forced to critically review their products, services, processes and customer profiles, which has provided them with significant volumes of information with which to make business decisions.
The problem has been the cost of compliance and how to make efficient use of the information collected for income generation, rather than just regulatory compliance. These issues of cost and usability of information have been influenced by the volumes of paper produced and how it is managed and stored – itself yet another regulatory headache!
Finally, events have transpired to actually provide real business benefit through an oft and much hyped technology – information management, otherwise referred to as document management, imaging, workflow, scanning, and more colloquially, the paperless office. Suddenly we have a marriage of evils – regulation and technology – that reduces the cost of the former while facilitating the use of the information collected to improve business.
In a mature business, the second most valuable resource, after that of your staff, is the information gathered and stored, be it on paper, on a computer system or in people’s heads. We all spend a lot of time, money and effort gathering information and increasing knowledge. How many times is that squirreled away, made so unavailable as to force the same time, money and effort to be expended again for someone else in the organisation to gather exactly the same information? How much Know Your Customer information is stored in the silo that is the compliance department, when the marketing department might be able to make valuable use of it? How many times does a customer request for information necessitate a call back several days later, when the answer already exists but is just not immediately retrievable?
The answer to many of these issues lies with technology that allows businesses to digitalise paper information, categorise electronic information, provide a central information repository that allows easy searching, retrieval and integration with other business applications, and finally constructs electronic information flows that mirror the existing manual and paper based business processes. On the face of it, it appears to be simply a matter of purchasing and installing a mixture of systems that provide these functions. However, the opportunity should not be lost to broaden the scope of what is being looked at to see how a corporate information management strategy can harness the technologies to reduce costs, increase efficiencies, improve customer service and strengthen the knowledge of your staff. This can be only done if you first understand and have defined exactly what your business process flows are, who needs access to what information and how automating the process will affect your staff, customers and systems.
When developing this strategy the most important aspect is not the flavour of technology employed, but the way it is delivered. This technology is a business enabler, so must be aligned with your business processes and must integrate with your existing applications. The choice of technology should come late in the process; it is vital to obtain expert guidance on formulating a strategy, looking at the processes in your business and building a framework that is designed to deliver tangible benefits that improve service and efficiency and reduce cost. Then find a technology and service provider who understands what you are trying to achieve and can deliver the tools and services to make the framework a reality.
Finally, ask yourself if you really want to incur the capital cost and risk of implementing all of this in-house, or whether it might not be better to contract for the services to be provided by a third party. A well-defined service agreement from a provider of a hosted solution can enable a low risk roll-out at reduced capital cost, without the headache of managing a complex technology infrastructure. Although your strategy must cover all areas of the business, your implementation is best achieved in manageable chunks, one business unit at a time, or one process at a time. This way benefits accrue early on, which helps pay for and justify later parts of the project. Also, lessons can be learnt along the way to improve the roll-out at each stage, and staff can be introduced to the new working practices in small groups or in a manner that affects only part of their working day.
In summary, the headaches of the last couple of years have provided the Jersey finance industry with opportunities, but they can be taken advantage of only if a business has the means to manage the information it acquires. This requires technology, but should not be seen purely as a technical issue – the business needs to understand its requirements and processes and how to best take advantage of information before it embarks on implementing the technology.
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