CASE STUDY:OPERATIONS POWER PERFORMANCE Operations moves into the limelight: A view from Pershing COO Lisa Dolly As sweeping regulatory changes and the pressures of rising costs have become realities in the financial services industry, operational efficiency has moved out of the back office and onto the front line in roles shaped by customer needs To stay competitive, financial services firms must rethink how they operate This mind-shift has resulted in a global response to increased regulations, a move toward greater transparency around complex market dynamics and new forms of corporate governance arising from the 2007-08 financial crisis Industrywide operational transformation has delivered a better experience for clients—who expect top-end investment analysis, risk management and timely execution in volatile markets It has streamlined processes to foster communication, merge silos and put richer portfolio resources into the hands of customers “For Pershing, operational transformation really means the opportunity to change the way that we are conducting our business,” says Lisa Dolly, chief operating officer of Pershing LLC, a unit of BNY Mellon, the sixthlargest commercial bank in the US, according to the Federal Reserve “This transformation has at least three components First is to deliver a better environment for our clients to efficiently operate in Second is to mitigate risk and become more efficient in our operations And third is providing scale and reliability to adapt to changes in the marketplace from a volume and growth perspective.” Rapid change makes transformational success a moving target As firms reach objectives on the road to transformation, new goals emerge Gauging success is complicated—it’s an art and a science Step one, says Ms Dolly, is to establish baseline measurements for any process “You need to know your starting point, what metrics are suitable and which goals matter most,” she says Reducing transaction cycle time requires measuring how long cycles take today as well as weighing improvement against objectives When looking at efficiency improvement and risk, Ms Dolly cites work done by the industry aimed at shortening equity settlement time to two days post-trade date from three days currently Experts widely agreed in the wake of financial crisis that such a step would take some risk out of the marketplace Technology advances have played a key role in reducing risk and in providing new and improved tools for firms and their clients Routine upgrades enhance software, enabling it to stay on top of high-frequency transactions The technology platform supports game-changing transformation, including upgraded tools that fine-tune risk management or algorithms that see patterns in text and other unstructured data flowing across the Internet Innovative investment technologies bring investors closer to markets, where customers and operations increasingly share common space However, true transformation respects clients’ needs above all else “The ideal concept for us is that clients are communicating their needs, which in turn helps us identify the optimal transformative priorities,” Ms Dolly notes An Economist Intelligence Unit research programme Despite the many benefits technology offers, it alone cannot fully transform a business “Cultural entrenchment can sometimes impede progress,” Ms Dolly warns “There can be reluctance to change based on the unknown and part of our job is to understand, and even anticipate, those concerns so that our customers can make an informed decision.” “True operational transformation changes the way we manage our business,” Ms Dolly advises “It is not simply moving people around, updating technology or adjusting components of the business in isolation Transformation seeks end-to-end progress toward overarching goals The scope of one transformational initiative might have far-reaching benefits—shortening turnaround times on everyday processes; bolstering compliance and due diligence; increasing the ability to handle transaction volume; and reducing the need for manual intervention in automated customer orders.” Pershing assigns a high priority to the technology side of operational transformation “We have maintained a consistent investment in our technology year-over-year because of the critical role it plays in delivering solutions to our clients,” Ms Dolly says From her perspective, the most critical tools provide customers with resiliency during challenging times Successful operational transformation leans heavily on installing the right people in the right roles, says Ms Dolly, who joined Pershing as a management trainee right after college Since her trainee experience, the training program has been changed to accommodate new realities “We are focused on developing leaders instead of managers.” As always, trainees move around the firm to build expertise and professional networks, but in the end they are expected to champion new ideas and promote useful change—not just manage the businesses they inherit Given the significant internal and external challenges as well as the complexity of technology, regulation and compliance that face financial services firms, it is no surprise that operational leadership is becoming a critical voice in developing better strategies Forward-thinking firms see the importance of these solutions to meet the needs of current clients as well as to win new ones “As a COO you must pay attention to what is happening in the marketplace and the impact on clients,” Ms Dolly says “At the end of the day, it’s about helping them to meet their financial performance goals amid massive regulatory change.” All of this change can be daunting According to Ms Dolly, Pershing tracked more than 200 potentially actionable regulatory changes in the last year alone To keep up with these changes, Pershing hosts monthly compliance meetings, where it can educate customers on regulatory best practices and answer any questions they may have More broadly, across BNY Mellon, senior staff members sit on boards, committees and industry task forces to stay ahead of topics likely to affect customers, says Ms Dolly Seeing change from inception bestows a useful advantage Open lines of communication can influence regulation in the formative phase by highlighting overlooked opportunities or alerting regulators to unseen and potentially adverse consequences For more information on this case study, please contact us at broadridge.com/OperationalExcellence or call +1 800 353 0103 About Broadridge Broadridge Financial Solutions, Inc (NYSE:BR) is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and corporate issuers globally © 2015 Broadridge Financial Solutions, Inc., Broadridge and the Broadridge MKT_806_15 logo are registered trademarks of Broadridge Financial Solutions, Inc broadridge.com ... as to win new ones “As a COO you must pay attention to what is happening in the marketplace and the impact on clients,” Ms Dolly says “At the end of the day, it’s about helping them to meet their... their financial performance goals amid massive regulatory change.” All of this change can be daunting According to Ms Dolly, Pershing tracked more than 200 potentially actionable regulatory changes... change—not just manage the businesses they inherit Given the significant internal and external challenges as well as the complexity of technology, regulation and compliance that face financial