With over 20 years of experience in building, implementing and supporting financial service applications, Christopher John currently leads the revenue and expense management solutions as president at Broadridge. Prior to his current role, he was the director of fixed income trading systems for Bank Boston Robertson Stephens. There he was responsible for major technology development and implementation projects associated with Fixed Income Trading activity in the Global Markets Division. He has extensive experience gained through project managing multi-tiered application solutions on behalf of the corporate bank.
Bobsguide spoke to Christopher to discuss how businesses can create successful operational strategies and effectively manage and motivate teams.
You recently presented at TSAM London. What key points did you speak on?
The themes in my presentation from TSAM were on material changes from the buy-side operations and the impacts for running businesses more efficiently, with a particular focus on global businesses. The industry today is primarily focused on two things: The first is the fee structures which are changing, and the second is that there’s movement towards passive investments and margins are much lower. Businesses are actively looking at their cost structures to see if there’s a more efficient way to run their operations and perhaps leverage partners a little differently than previously. That’s where we step in as a service provider.
At Broadridge, we focus on bringing technology and managing the services and infrastructure of our clients. As many functions are repetitive and non-differentiating to these firms, we believe that there’s a willingness in the marketplace to outsource to larger providers that offer scalable infrastructure, as well as the expertise to support these types of operations.
For example, if you’re looking at investment accounting or data aggregation services, it’s really a matter of looking at the functions that are happening within the firms and saying “this is repetitive and operationally quite difficult - let’s get someone to do this for us.” That’s where we step in as a business and service provider, offering to take a lot of the weight off our clients in areas we’re already supporting across the industry; especially with a price point that is very compelling.
Are you seeing a new wave in technology innovation?
Yes. If you look back five years, a lot of firms would buy technology for spot purposes: E.g tech for risk management, tech for billing – these are really spot applications that work as specific functions to each firm.
What we’re seeing now is that firms are looking for broader solutions, and they’re looking for suppliers that can offer more than just technology that can perform the function. Technology purchases are now being mixed with additional services, for example we’re seeing a movement from clients asking us to host the technology in addition to supplying the solution, and for additional functions that take the load off the businesses.
If you partner or collaborate with a vendor with a substantial footprint, which Broadridge has, you benefit from a lot of expertise in the organisation. For example, for any particular function, we may have 50 people who focus specifically on that function, whereas the client may only have a few.
What are your tips for managing and motivating teams and businesses in a high-cost environment?
I think the best practise is working as a team, setting specific goals and targets and then measuring the goals. I believe that people get motivated when they are working towards a wider goal and really executing against a structural plan.
From my experience, when you then bring these goals to your teams then it’s very easy to innovate. People are thinking about the bigger picture. Not only that but they’re also thinking about the opportunity to increase revenues, save costs and really drive these concepts home, while also getting people to think in time increments of one, three and five years. It takes a significant amount of time to re-engineer.
What are the areas of concern for asset managers with issues around data and accuracy?
In terms of trends, revenue pressure is certainly affecting the industry. There’s also audit and regulatory oversight which isn’t necessarily going away any time soon. There’s a cost of maintaining all of the audit and control functions; and that cost needs to be managed.
All this points to revenue numbers coming down as a general trend in the industry, and that means margins are getting squeezed. Smarter firms are looking at setting up broader operations that can scale much quicker than tackling business region by region. That business model is changing. We’re also seeing a global approach with regional expertise really running the functions, but within a global process.
When your revenue has a tendency to change then you have to change the cost structure of your business as well to maintain your margins. These kinds of changes happen in years - when you’re really looking at re-framing your business, you would typically look at what the industry is moving towards; what new aspects are there to adopt, is your business in the market for these functions?
I always look at things in five-year increments. Five years ago, most of our technology clients in revenue and expense management were hosting the technology themselves. This trend has started to go away, with fewer client-hosted solutions today. The majority of our clients will have us host it for them. And then the next question we’ll get is how we can take other workloads off them from their operational teams. That’s when our expertise comes in. We can give them work flow creations and ideas, which are very well received by our clients, and in the long run we usually handle the overall function for them.
What trends/predictions do you think 2017 will be remembered for?
I think every major firm is looking at cost savings on infrastructure and cloud-based computing very seriously. People are trying to figure out the best way to optimise their cost structures as technology is a very significant component in any firm’s expense line. You have to look at the functions within a firm that are repetitive and non-differentiating. Suppliers offering a mutualised, shared service model can do it much more cost-effectively than an individual buy-side firm – ultimately doing the same function for multiple firms creates a significant efficiency. So I think the trend of firms reviewing their business operations and transforming operational models in response to cost-pressure will continue.
I think Broadridge overall is performing very well as an organisation; we’re at the forefront of some of these changes in the industry and investing to stay at the forefront of those trends. We have a vision of where technology is going, where managed services are going and what our clients are asking from us in the long term. We have a strategic, global perspective and work in close alignment with our clients to support significant components of their business.