NEW YORK, April 4, 2016 /PRNewswire/ -- According to Bloomberg, Credit Suisse will eliminate an additional 2,000 jobs, bringing its total head count reductions for the year to 6,000. Nomura is also preparing to lay off as much as 30% of its workforce in North America. These reductions follow similar cuts to operations made by Bank of America, Merrill Lynch, Deutsche Bank, and Goldman Sachs, as investment banks struggle. But as Wall Street continues to slash its workforce, who will be left to do the work?
Over the past few years, consulting firms have picked up some of the slack by managing the numerous regulatory-driven projects created by the Dodd-Frank Act. Most of this work has gone to the usual suspects, such as Deloitte and Accenture, but banks are beginning to reassess the amount of work they are allocating to the big consulting firms, as they look for ways to reduce what they are spending on these high-cost alternatives to full-time employees. Other forces are also at work. With fewer and fewer people to do the day-to-day work, you need more than a team of people to manage projects. You also need people with relevant experience to get things done. This realization is causing a shift toward smaller, lower-cost companies, with the expertise to do the heavy lifting and the incentives to improve processes and optimize operations.
One such firm is GIBC Advisors, a provider of on-demand subject-matter experts, project managers, business analysts, and process design engineers. Last year, the company picked up a significant amount of work related to implementing Dodd Frank's Volcker Rule and Enhanced Prudential Standards. According to the company's CEO, Greg Wood, "GIBC has thrived in this environment because our clients need help getting things done, and they don't have the people to do it." But, the company is not just providing staff augmentation. Wood indicated that the company more than doubled its revenue this year, even as regulatory work comes to an end, because there's growing recognition that the industry needs transformative change to compete with the innovation coming out of Silicon Valley. As Wood put it, "we are pushing automation like crazy because it eliminates errors, reduces risks, and lowers costs. It's the only way forward for our clients."
One of GIBC's automated solutions, DeskMonitor, was developed to manage, monitor, and document hedge effectiveness for trading desks taking advantage of Volcker's risk-mitigating-hedging exemption. Under the exemption, each desk needs to be able to monitor and demonstrate effective hedging to avail itself of the safe harbor. Nevertheless, most trading desks, if at all, monitor hedge effectiveness infrequently and rely on manual processes and disjointed spreadsheets. DeskMonitor provides an easy-to-use interface that allows supervisors to review the desk's hedging activity for correlation and effectiveness. Sorting and compiling this information would otherwise require the focused efforts of multiple full-time employees. Because it is not dependent on any particular IT infrastructure, banks can bolt DeskMonitor onto whatever technology systems they already use. "This flexibility makes implementing DeskMonitor easy and relatively inexpensive," said Ed Ryan, who is responsible for automated solutions at GIBC Advisors. "We can provide clients with a better way to manage their business, while demonstrating to their regulators that they are serious about compliance," Ryan added.
As the industry looks down the road, banks will be forced to automate and improve efficiencies or companies coming out of Silicon Valley that can do things at a much lower cost may replace them. "As the industry continues to contract, automation is the only way to survive," advises Wood, "and we will continue to focus our efforts on driving efficiency and bringing automated solutions to our clients." For now, having fewer people to do the work may be painful, but automation may be the ultimate cure for the industry's woes.
About GIBC Advisors
GIBC Advisors provides business managers with on-demand access to subject-matter experts, project managers, business analysts, and process-design engineers to help them get their regulatory and business-transformation projects done on time, with less stress. Solutions are flexible, customized, and scalable, which accounts for its strong appeal in a world where there is more work to be done, with fewer people. The company also continues to lead efforts to provide Wall Street with automated solutions that will drive efficiency, reduce cost, and eliminate human error.
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SOURCE GIBC Advisors