interesting idea but how would you measure the revenue, unless you mean the banks IT dept to start selling services/expertise to third parties and or develop/license out new technologies? I still envisage it as an internal function or service provider (part of overhead cost) to enable the core business of banking to generate profitBillyB wrote:Plus, IMO, technology is fundamentally set-up wrong way - i.e. as a cost centre, rather than a profit centre in it's own right. The latter, i would hope, would induce more discipline and innovation.
You would be correct in your observation; technology and back-office staff tend to be easy cost reduction targets.Beeroclock wrote:As an outside observer I find the extreme hire / fire/ rehire/ outsource/ in source/.... cycles of these banks astounding. It doesn't seem very strategic at all, just always tactical moves to cut functional costs when results poor, and catch it back up again when margins are more favour able. I'm sure there's more to it than this, but that's how it comes across to me....
The last time the banks were in hiring mode was in 2011 and since then the cost pressures are getting worse and worse and banks have restrained from making massive layoffs of 2008-09 style but now finally it has occurred to them that revenues aren't going to improve and they need to get the ROE from the single digits to atleast double that and hence in the foreseeable future I do not see banks getting back to the hiring mode.Beeroclock wrote:As an outside observer I find the extreme hire / fire/ rehire/ outsource/ in source/.... cycles of these banks astounding. It doesn't seem very strategic at all, just always tactical moves to cut functional costs when results poor, and catch it back up again when margins are more favour able. I'm sure there's more to it than this, but that's how it comes across to me....
And the wave of mandatory regulatory changes are forcing banks to spend money on new systems, on compliance, to hold more capital, and these are sunk costs that do nothing to increase RoE.Wd40 wrote:The last time the banks were in hiring mode was in 2011 and since then the cost pressures are getting worse and worse and banks have restrained from making massive layoffs of 2008-09 style but now finally it has occurred to them that revenues aren't going to improve and they need to get the ROE from the single digits to atleast double that and hence in the foreseeable future I do not see banks getting back to the hiring mode.Beeroclock wrote:As an outside observer I find the extreme hire / fire/ rehire/ outsource/ in source/.... cycles of these banks astounding. It doesn't seem very strategic at all, just always tactical moves to cut functional costs when results poor, and catch it back up again when margins are more favour able. I'm sure there's more to it than this, but that's how it comes across to me....
Today HSBC reported results which were short of expectations and the shares fell 3%.
That sounds like a good strategy for programmers in Singapore. However, all it takes to reverse that is a newly hired MD who wants to prove him/herself by changing (anything). That MD may be hired for a different purpose in the first place.Wd40 wrote:Interesting BillyB. The bank that I work in follows the method that you mention i.e. outsourcing to India based vendors. But I feel the JP Morgan method is more effective, i.e. keeping the jobs in places like Singapore where good talent is willing to stay and I am a firm believer that its better to have 3 sharp technologists with multiple skills rather than having 10 mediocre outsourced resources who specialize in only 1 thing each. Thats why I feel the future is going to be the Agile inhouse way rather than the outsourced way. From what I know JP Morgan is moving several roles from its Bangalore captive centre to Singapore because they have had limited success there.
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