High level current state financial and regulatory reporting overview
Inflexible legacy systems Front Office IT solutions form a crucial part of the competitive advantage of an investment bank. But these systems must be properly supported and integrated into downstream financial reporting systems and processes to enable Finance to report at a product line, business or group level. Point solution limitations have meant that investment banks have long had to develop in-house proprietary solutions. This has meant that Finance IT architectures are far from becoming high performance or even adequate for current business needs.
Lack of standardised processes Multiple products in multiple lines of business have led to many differing financial reporting processes. A lack of process standardisation and numerous process workarounds hinder end to end transparency of all business line data. This not only impacts the ability to close the financial books rapidly at month end, but also means the Finance transformation journey does not have a consistent start point. Investment banks should first evaluate the processes being deployed to produce reports across different lines of business. By thoroughly reviewing existing processes and benchmarking against competitors, banks will be in a position to truly understand what changes need to be implemented. By taking this approach, tactical and strategic solutions can thoroughly be evaluated.
Single point of failure The knowledge and experience of key Finance professionals, such as those in Product Control, Independent Pricing and Validation, or those in Finance Change with a comprehensive end to end overview has not always been harnessed in an efficient manner. These individuals have a comprehensive end-to-end overview of all front to back financial reporting processes, and not harnessing effectively has restricted the ability to achieve high performance. Automating and standardising the processes, reducing the number of legacy systems, and implementing a golden source of data will limit the single point of failure quandary and reduce the dependency on key members of the team.