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Operations teams: under-
resourced, under-appreciated and
now under increased pressure
The global COVID-19 pandemic is only accelerating the challenges facing operations teams who are under-
resourced and often under-appreciated, writes Virginie O’Shea, post-trade FinTech analyst and advisor.
B
usiness as usual isn’t always
smooth sailing in the world of
operations, so given we’re current-
ly faced with an unknown period of time
working from home and some backup lo-
cations, things aren’t rosy at the moment.
Add to that the rollercoastering markets
and insane processing peaks caused by
volatile trading activities, and describing
things as a ‘challenging situation’ might
be something of an understatement.
The nausea-inducing market volatility
is not only causing challenges for the
front-office trading community stuck
out in UK backup sites like Croydon
and Lewisham, it’s also causing major
headaches for the middle- and back-office
staff struggling to keep up with process-
ing all those trades. There are numerous
departments working late into the night
to process the trading peaks across the
globe on systems that just weren’t built
for large teams working remotely. Tales
of glitchy mainframe workarounds and
flaky Wifi connectivity bound across the
industry. Logging into your key systems
and remaining connected is a challenge
in itself.
Moreover, after the endless rounds
of cost-cutting over the last decade or
so, these teams are already chronically
shorthanded. As more people unfortu-
nately fall ill, the more the pressure builds
on those that remain (relatively) healthy.
There is an ever-decreasing circle of
pressure building on these teams. Given
the systems on which they work are often
heavily customised, while user interfaces
are not at all intuitive to use, key person
risk is incredibly high. If it takes weeks to
train new staff to use a particular system,
then problems are sure to happen, espe-
cially if your online training manuals and
processes are as poorly put together as
your patchwork of legacy systems.
The challenge of managing offshore
locations when there are travel bans in
place is another HR pain point for the
executives in charge. Yes, a lot can be
done over Skype or other similar software
packages, but many execs have relied on
in-person visits to get things done. What
happens if your main method of govern-
ance enforcement is the bi-weekly visit
from head office?
Add the human element into all this of
people cooped up with their families for
weeks on end, lack of sleep, etc. and a
rather disturbing picture emerges.
Operations teams are under-resourced
and often under-appreciated. How many
stories have you read in the financial ser-
vices press about what’s going on in the
trading community versus what anyone in
post-trade is faced with on a daily basis?
The focus is of the media naturally is on
the market impact of all this and the end-
less woes of traders make a good story,
even if most of this stuff is now electronic
(in the equities world at least). Spare a
thought for the middle and back office
operations teams – they’re out there,
working hard to make sure everything
remains functioning.
Also – my plea to the C-suite when all of
this is (hopefully) over – learn from the
challenges that this experience has taught
us. Invest in your key post-trade systems
– it’s long overdue. The project risk in
replacing these systems can be high, but
so is the risk caused by doing nothing.
The industry has taken a long time to get
systems into cloud-hosted environments,
we need to move faster than this.
Take time when you’re back in your
regular Hudson Yards or Canary Wharf
office with a view (rather than a business
continuity basement or your own home),
to examine your operational resilience.
Where are the pressure points and how
can you alleviate them? So that next time
something like this happens your firm
is in a better position and your ops staff
don’t have to work all hours to keep the
lights on.
Also – don’t forget that this experience
is also a fertile learning ground for the
regulatory community. The UK’s Finan-
cial Conduct Authority already has a pa-
per out on operational resilience and no
doubt, will be taking note of just how well
each firm lives up to their promises.
Virginie O'Shea
82
Global Custodian
Spring 2020