Financial institutions, and in particular securities services firms active in clearing and asset servicing, have seen profound regulatory and infrastructure changes in markets across the world in recent years. A few stand-out examples would be the Dodd Franck Act, EMIR, Target 2 Securities, CSDR and the move to T+2 in Europe and the Hong-Kong Shanghai stock connect. Though each heralds its own set of advantages and challenges, they all require participants in financial markets to embrace innovation in order to adapt.</p> The biggest securities services providers span multiple continents, making it a requisite to service clients not only across time zones, but with local nuances in regulation and market practice, all of which is subject to change.</p> “It is no surprise then that innovation has become a key differentiator in our industry. Being the first to market with new products and solutions is often the difference between success and failure,” comments Philippe Ruault, head of clearing and settlement at BNP Paribas Securities Services.</p> Would it be reasonable, however, to compare the complexities dealt with in financial services to those seen in industrial processes? “Take for example the design of an A380 aeroplane, which combines millions of components, integrates new technologies, and meets very high security constraints, or the manufacture and distribution of pharmaceutical goods across the world in compliance with the rules and guidelines of national drug administrations. Perhaps there is surprising value to be gained from making this comparison,” says Ruault.</p> Taking a better view of how other industries are driving innovation and managing complexity could be a real advantage when developing financial products and services, in particular for asset servicing providers who help their clients through the implementation of complex market changes like the recent AIFMD, or the imminent T2S.</p> Innovation is not only about generating new ideas, but efficiently converting ideas into marketable products and services. It is also about managing product initiatives and product portfolios in correlation with an overall business strategy.</p> Product lifecycle management tools are new to financial services; they are a heritage of industries such as transportation, industrial equipment and consumer goods, which are often even more complex and regulated environments than financial services. Though some institutions have made a real effort to ingrain innovation into their corporate culture and have taken some very encouraging steps, there remains much to be done, and perhaps a lot of value can be found in looking outside our industry for methods that have worked so well elsewhere.</p> Article contributed by BNP Paribas.</em></p> </p> </p>