Redeploying Staff
As the Year 2000 approaches, T+1 looms and Internet trading takes off, some IT staffers are facing the choice to be flexible, or be replaced by technology. Indeed Cap Gemini's Y2k staff is facing a "flexibility" issue. The consulting firm created a Year 2000 group about five years ago to help companies and financial institutions rid themselves of their Y2k bugs. Now that the Y2k business is winding down, the group, which has grown to over 1,000 people, will no longer exist, says Peter Chin, vice president in Cap Gemini's Financial Services Group.
Have no fear, although there is no longer Y2k work to be done, Cap Gemini plans to retain this workforce and focus the group on a new business-Applications Management Servicing. Applications Management Servicing means working to implement and train staff on new systems, while running a firm's former system in tandem on a service level agreement, Chin explains. He adds that straight-through processing services is the industry's next focal point, and a group dedicated to Applications Management Servicing will help Cap Gemini service client's requests for further automation, says Chin.
He adds that Cap Gemini's Applications Management Servicing group will also work on other large-scale projects. As T+1 gets closer, financial institutions are going to be scrambling to buy systems or use service bureaus, he says. "It's too late to build a new system, financial institutions don't have the luxury to take two years for a large-scale project anymore. By the time the system is developed, the technology used will be obsolete," he says. As a result, Cap Gemini is planning to get more involved in the service bureau business using the Applications Management Servicing team as its manpower.
Internet Displacement
The evolution of online discount brokerages will also displace many staffers, Chin claims. Chin says this movement makes way for customer relationship management. He explains that as brokers are replaced by Internet trading technologies, the Street will "reengineer their sales people and they will become more involved in portfolio analysis." In other words, instead of selling financial products, brokers will sell research. Using CRM technologies, financial institutions that have adopted online brokerages can track the products clients are buying by the number of hits on the trading system. Brokers can then be used to sell targeted research to these clients.
Operations Obsolete?
Chin also questions the future of some middle-office and back-office support staff. With T+1 on the horizon, and straight-through processing a must, technology will likely replace staffers in these areas, he says. He adds that financial firms are working to redeploy these staffers to front-office support jobs by placing them in call centers as client service reps.
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