Not too long ago, banking was something abstract that Other People Did. We all needed a bank account and carried around plastic cards which enabled us to move money from one electronic container to another, we got statements in the mail, and we maybe had a degree of anxiety whenever we needed to ask the banks to do us a favour, such as forgive us a fee or let us buy a house.
But there wasn’t much thought given by the general public to all the machinations required to support that global system, because it mostly worked, and our consumer-level intersections with it happened as expected.
Banking is ultimately a trust relationship. We trust that the money we deposit today will be available to withdraw tomorrow, we trust that the arithmetic will be performed honestly when computing fees and interest, we trust that our accounts will be reasonably protected from unauthorized access or use. The business of banking works because banks adhere to these common rules, even when they compete with one another. It has been this way for millennia; the exceptions are flagged, the loopholes are closed, and the banks absorb the losses.
Of course, since 2008, banking has been squarely in the crosshairs of public scrutiny, and the existing regulatory burden has itself been examined for completeness and integrity. The result is that banks in major markets are now compelled to disclose a lot more detail about the real details of what they do and what it costs the consumers and institutional customers to do business with them. Worst of all, the trust has been eroded because of the immense losses suffered by real account holders, either directly or indirectly. We trusted the financial system not to play fast and loose with speculative assets and questionable ratings, but it didn’t work out this time.
So banks are now in the business of rebuilding trust. This is a gesture about reaffirming the perception of security, and a whole industry exists which allows banks to develop controls and measures which can be shared with shareholders, auditors, and regulators. Like much of the business of banking, these activities were often invisible to end customers for years, and banks have invested heavily to create sophisticated internal security practices designed to identify fraud, abuse, and unmitigated risk. But at the minute none of these activities resonate with the general public.
Security performance and benefits need to be brought upstairs, from the server room up to the board room. This is no longer just about the tactical goal of keeping things contained in-house; it’s about developing governance programs and reporting mechanisms which proactively educate and satisfy external consumers, and quantify the effects of those same controls and measures.
We can talk you through how you can get faster exchange of market information, trading, clearing and settlement of secure transactions; closer to your customers, anywhere in the world; smarter ways of reducing complexity and increasing liquidity across the trade cycle through a powerful range of award winning solutions to meet customer needs across the STP chain.
BT manages and secures the world’s largest financial community linking the global market infrastructure throughout the trade lifecycle. One in three traders globally uses a BT turret.