eversheds digital banking seminar obtaining the right technology 30 september 2015 eve england...
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Eversheds Digital Banking Seminar
Obtaining the right technology
30 September 2015
Eve England
Principal Associate
Eversheds LLP |
−Why is obtaining the right technology important?
−Digital platforms - investment and strategy−Facilitating innovation−Getting the contract right−Maintaining a competitive edge
Overview
Eversheds LLP |
−Institutions focus on Digital Banking in a customer focused manner
−However, without the right technology and the right supply contracts, the end product may fail or be non-compliant
−My session looks at obtaining the correct technology in the most efficient way
−To avoid failure, we advocate a “holistic” approach between the Bank's innovators, procurement professions and regulatory and sourcing lawyers
Why is this important?
Gough, Partner
Eversheds LLP |
The UK banking landscape is changing, and a far greater emphasis is being placed on mobile banking and a general move towards innovative customer engagement initiatives
−Legacy systems• A particular challenge for established banking institutions• Consideration of existing IT infrastructure strategy• Adapting old systems via change control or new cutting edge
systems? A mixture of both?
−New entrants• Ability to consider innovative solutions as a starting platform• Funding to invest in expensive technologies? • Lack of established risk and compliance frameworks
Digital platforms – investment and strategy
Eversheds LLP |
It is important that financial institutions consider approaching IT strategy in an holistic manner
−Innovators & tech teams• What is the digital solution being sought?• Is the technology relevant - market testing / customer focus groups• What is the impact on existing models/procedures?• Extent of work needed to implement?• Expertise needed?
−Sourcing professionals• Costs to the business• Engaging the operational and business teams early• Choosing the best supplier• Negotiation with more than one supplier
Facilitating innovation
Eversheds LLP |
−Legal & compliance teams• Commercial contract specialists/technology lawyers• Product teams (retail and commercial)• Regulatory lawyers – can you provide the model within the relevant
regulatory environment and within the financial institution’s risk appetite?
−Using the right contract• Waterfall v Agile
• Waterfall – platforms• Agile - Apps
• Consider testing and implementation requirements• Using multiple third party providers• Do you need a systems integrator?• Consider how the contract will be ultimately managed
Facilitating innovation (cont’d)
Eversheds LLP |
Once the internal approach has been confirmed, it is then necessary to ensure that your contract provides the necessary framework for delivering the relevant innovation.−Detail clearly what you expect from your supplier−Focus on how the project will be delivered and make the contract as
practical as possible −Try to avoid change control costs and disputes later on−What level of implementation and testing is needed?−Consider assumptions and dependencies, although take care to
avoid deadlock
Getting the contract right
Eversheds LLP |
−Encouraging good performance • Consider the practical ways you can look to encourage a good
working relationship with your supplier • Service levels
• Take care when agreeing service levels • Shift to 24/7 banking • Instant functionality
• Gain shares• Other innovative incentives?
−Good governance throughout the contract term will be key
Getting the contract right (cont’d)
Eversheds LLP |
This section sets out some of the key contract provisions that will need to be included in any contract with your suppliers
−Regulatory compliance • Does the contractual framework allow you to be compliant from a
regulatory perspective?• Involving appropriate product teams –retail/commercial• Are your risk teams comfortable with the document?• Audit rights?
−Does the supply involve a material outsourcing?• Are the principles of SYSC 8 captured?• Do you have sufficient control over the supplier?
Getting the contract right (cont’d)
Eversheds LLP |
− Protecting customer data• Balance between the legal framework and delivering a good
customer journey• Future proof the provisions
−Liability• Have you included a robust and precise liability framework?
Getting the contract right (cont’d)
Eversheds LLP |
In the new digital era, maintaining a competitive edge remains a constant challenge.
−Flexibility - Focus on ensuring that your contract has a sufficient degree of flexibility built into it• Software updates• Encouraging innovation throughout – product enhancement requirements• Utilising change control procedures• Specifying upfront how regulatory changes etc. will be managed and specify
which party will be liable for the costs of implementation
−Exclusivity & IPR• If you are developing cutting edge systems, consider the need for periods of
exclusivity.• Will you want to own the IPR or will licencing provisions suffice?
Maintaining a competitive edge
Eversheds LLP |
No team is an island!
Summary
Questions?
eversheds.com©2015 Eversheds LLPEversheds LLP is a limited liability partnership
Principal Associate
Eve England
+44 782 798 7823eveengland@eversheds.com
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