By Nurunnasihah Ahmad Rashid
KUALA LUMPUR, Oct 27 -- Successful business growth depends on true scalability business model that allows for expansion and revenue growth while minimising increases in operational costs.
But how do you focus towards scaling your business without increasing the costs, while still building a strong organisation?
According to a business development expert, firms need operational stability and greater transparency in the post-trade lifecycle to effectively support their evolving trading strategies, gain more insights on counterparty exposure and reduce risk.
Depository Trust and Clearing Corporation (DTCC) executive director and head of business for Asia Pacific Hasan Rauf said these could be achieved by streamlining and automating existing workflows and processes in the middle-office.
“By removing manual processes and replacing them with automation, costs and risks are lowered while increasing the firm’s ability to scale as volumes increase.
“Automating processes, either through insourcing or outsourcing in the middle-office is key to building a scalable business,” he told Bernama.
He said inefficient operational processes that require human intervention in the middle-office would increase the risk of trade failure.
Citing an example, Hasan noted that at DTCC, the corporation sees an increasing number of firms pursuing technological advancements more aggressively than before.
“To a large extent, this rise in adoption echoes the realities of the current environment in emerging markets, including the need to improve revenue to capitalise on emerging opportunities, to mitigate new and existing risks, and to achieve a sustainable competitive advantage.
“Technology can often be a solution to many of these areas. At the same time, market participants are increasingly looking at asset class expansion across markets to broaden their reach,” he added.
He said firms must ensure that their middle- and back-offices are able to support multi-asset strategy and diversified portfolio, not only to cope with the new asset classes but also to achieve the scale necessary to support additional trade volumes.
“An automated, scalable post-trade environment that supports a variety of trade workflows, including domestic and across borders is crucial to facilitating business expansion and can be an enabler for a firm to grow.
“Besides, by investing in infrastructure that promotes greater transparency, cost reduction and operational efficiency, firms can deliver value more quickly to their end clients, while keeping pace with the industry,” he said.
Hence, Hasan said to remain competitive, firms in Malaysia and across Asia must be creative in their approach and identify innovative ways to further reduce costs and risks, as well as improve the client experience.
“Information technology can reduce time to market and provide a secure, resilient and extensible platform to do business with clients and business partners.
“In all cases, the adoption of new technology must satisfy a business case and should meet or exceed existing risk tolerances,” he added.