Failure to prepare could cost London its reputation as a global financial hub
A recent survey conducted at TradeTech London by IPC Systems, Inc, a leading provider of voice and electronic trading communications solutions to the world’s top financial services firms, has revealed that nearly 70% of investment bank staff think that the City is lagging behind in preparation for the Games with nearly half of respondents unsure whether their company has a Business Continuity Plan (BCP) in place.
Asset management companies are the most prepared, with 76% declaring they have a plan – a figure that comes in stark contrast to the 17% of prop traders who say they are ready with a backup solution. “It is telling that even within the City, there are major variations across different types of firm when it comes to expected impact of the Olympics and preparation levels”, noted Simon Jones, Senior Product Marketing Manager at IPC.
With 50% of brokers fearful that “Olympic Gridlock” could cause temporary market disruptions, and one in five concerned it could even spell the end for some City institutions, it is clear that the Games are a major cause for concern in a sector that is already under strain and working hard to retain its position as a global leader.
“It is perhaps not surprising that anticipation and preparedness come hand in hand” said Jones, “though concerning that prop traders seem not to recognise the potential for disruption. It is possible that some companies are still suffering from a ‘Millenium bug hangover’, and are reluctant to invest in contingency plans in case they are not required.”
According to the research, the big differences in terms of levels of flexibility between the front and back office staff could also prove problematic for many banks. While many banks are being encouraged to allow staff to work from home this could result in back office support effectively being cut off from the traders who, for regulatory and compliance reasons, will generally have to remain based in the office.
Despite this, nearly half of off-floor trade support staff, 88% of whom are analysts, said that their company’s BCP plan involves them working from home. The value of these BCP plans will be negated however, if companies have neglected to supply their trade support staff with the appropriate technology to allow quick and reliable lines of communication between trading teams.
“Advanced complex financial instruments, increased government regulations and exponential increases in data are driving more elaborate trade workflows, which include more people and functional groups across more geographies, and the implications of being unable to connect with risk analysts early enough in the trade lifecycle are significant”, warns Jones.
“Access to a Blackberry does not equal a reliable communications plan. This comes back to the debate around ‘allowing’ vs ‘enabling’ remote working. Compliance and transparency requirements mean that effective collaboration cannot be compromised, whether trading teams are in their normal workspace or a remote location. Financial services companies in London must be prepared to enable effective remote teams. The stakes are too high for traders to gamble with unnecessary risk”.