Banks’ middle and back office operations are facing far more challenges today than ever before.  As the engine rooms of their firms, they have to keep operating efficiently, despite an environment of far-reaching and interrelated new regulations, extreme margin pressures across business lines and ever-increasing demands for speed and accuracy.

To survive, operating models have had to adapt to manage the increased workflow volumes and requirements for the plethora of regulations, while keeping costs in check. A multitude of business models have emerged – outsourcing, insourcing, off-shoring, on-shoring, centralisation, decentralisation – all adding to the complexity.  Intensifying the pressure, tens of thousands of exceptions, queries and issues arise daily, most of which require some form of human intervention to resolve.  By their very definition, transactions involve counterparties — and when things go wrong, these parties need to work together across teams, companies and time zones in order to straighten things out.

The result? A convoluted, time-consuming, costly issue resolution process that exposes participants to operational, settlement and counterparty risk, while potentially eroding client satisfaction.

From discussions with operations leaders from some of the world’s largest banks, it is clear that current workflows are sub-optimal.  There is an urgent need to address common operational issues in an innovative way without causing yet more disruption. Banking operations is not just about automation and straight-through-processing.  It is also about people, and banks can better optimise productivity by giving staff the right tools to work quickly and securely with counterparties to resolve issues and make work flow efficiently.

Imagine if operations staff could work within a purpose-built ecosystem that enables them to address manual interventions efficiently, intelligently and securely.  Imagine that it is easy to find the right people from across the industry to effectively resolve issues based on their operational expertise. Imagine that this environment learns work patterns and applies the knowledge to help resolve future issues.  This would empower the individuals managing exceptions and help ensure that issues are resolved in a timely and compliant manner, thus freeing resource to focus on value-adding activities.

The future of banking operations goes beyond automation. With the continuous evolution of financial methods and regulations, it is unlikely that financial services will ever be purely based on end-to-end automated processing of all transactions.  People will continue to direct and correct the processes when things go wrong. It is time to embrace human capital in operations, forming an advanced operations network as real as SWIFT or FIX, and just as significant in underpinning finance.

There is clearly a need for technology that improves role-to-role interactions and addresses the unique requirements of the middle and back-office. There is an opportunity for technology providers to work closely with banks to develop a methodology designed specifically for banking operations, enabling operations leaders to de-risk and industrialise their businesses securely with the least disruption, while enhancing client satisfaction.

It’s time to make work flow across the capital markets with greater efficiency, security and control. This is the future of banking operations.

John O’Hara is CEO & co-founder of Taskize