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Part II: Back Office Streamlining

This is the second installment in our Financial Services content series: Have a look at the Introduction: Succeeding in 2021 (and beyond) and Part I: Security and Compliance.

Why You Should Streamline, and Why You Should Start Now

Mid-market financial service businesses are hampered by unnecessary complexity. One of our Principals refers to it as the “spaghetti underneath the website” – multiple systems that can’t talk to each other, often requiring tedious and demoralizing labor from staff.

Just as often the complexity is driven by external factors. Insurance brokers, for instance, may deal with a wide range of providers, each with their own systems, complexities, and idiosyncrasies.

We won’t pretend that it’s easy to straighten it all out. But it is more than achievable if you take a systematic approach. And, frankly, you can’t afford not to. While we are bullish about financial services in the near future and beyond, the sector will see undeniable pressures in terms of regulation, competition, and disruption.

But these pressures offer opportunities for the best to forge ahead. When you streamline your systems and processes – that is, improve integration with customers, suppliers, and service providers—you create a clear advantage over competitors.

The basic goals of streamlining are:

Of course, then there is the question of how to go about it. In our experience, the key is to focus on three areas: reinforcing leadership, knowing what you have, and creating a timeline.

First: Reinforce Leadership

Priority number one is to appoint someone with C-suite authority to have ownership of the streamlining project. Most executives are unlikely to have the time (or the inclination!) to run this particular show, but the project will never get off the ground without a real leader in charge.

And expect this leader to be deeply involved. Important decisions about processes, staff, systems, and vendors will be needed, including renegotiating contracts and hiring. These decisions will cut across departmental boundaries; the leader will need the time, authority, confidence, and competence to pull people together and to make changes happen.

It may be unrealistic to expect a CFO to do this, as they are too busy. Your IT head may have the knowledge but not the authority and people skills. The HR Director may not have the detailed systems knowledge. Even if there is no one perfect person at your company, there must be a clear leader regardless.

And set deadlines for delivery of specific improvements. You may decide on a stream of smaller improvements, or a large, transformational project, or both. Either way, unless you have clear deadlines, you can expect the project to be overtaken by other priorities.

Second: Know What You Want and What You Have

This step involves first understanding what you want to achieve. Then you figure out what you actually have and how well or badly things are working.

Your goals may include:

After you are clear on your goals, you next establish what you have. List every software product your people are using – and we mean every product – so you have a clear picture of how your business operates.

This is usually an enlightening exercise for our clients. It’s when they learn what they are actually using, and where they are spending money for no reason. They will usually also see immediate, no-brainer steps toward greater efficiency and security.

Freeman Clarke has created a simple way of visualizing the technology that a business typically uses. We call it the Four-Layer System Model. Think of your tech as having four layers, one atop another:

  1. Customer applications
  2. Business applications
  3. Basic services
  4. Communication and connectivity

There will undoubtedly be “systems” within your business that are informal; for example, vital information could be in a spreadsheet or an Access database.

And some systems will not be delivered via technology. For instance, it is possible that your company still uses paper for stock control or manages and stores contracts in filing cabinets! These systems need to be identified as well – because part of streamlining will be making them more efficient with technology.

And look into what staff are using beyond what the company owns – for instance, if they use personal email accounts for business or vice-versa. (They made need reassuring that this is not a punitive expedition; it’s information-gathering to look for gaps in connectivity and security.)

Finally, how can you build on what is working. Perhaps you have third-party systems already helping your company, and their role can be expanded. Or a department whose processes are working smoothly, and it could serve as an example for other departments.

In the meantime, see our ERP and Integration Issues Knowledge Center

Third: Make a Timeline to Streamline

At this point your streamlining leader has a clear picture of what the company is currently using and where many of the snags originate. Now the CEO must empower the leader and team: give them the resources and the confidence to create a simple framework of twelve days, twelve weeks, and twelve months.

12 Days

There may be simple problems that the staff knows all about (maybe for years), but they have put off fixing them. Perhaps some persistent people issues need to be addressed by training or redeployment? Perhaps some old laptops need replacing, or you need a shared calendar, so it is clear who is on vacation? Maybe there is an ongoing “cold war” between two departments that you can end with a daily stand-up meeting?

Now is the time to identify the quick-fix problems and, well, fix them.

12 Weeks

Many important problems can be fixed in this middle stage. Focus your efforts on making them happen. This may involve bringing together suppliers, or some simple custom software, or use of a low-code integration tool.

Whatever the issues, you may need managers and staff to put aside their normal priorities. And the focus must remain on the problems; no blaming should be tolerated.

Within reason, be prepared to spend money to deliver these projects. But don’t overdo the scrutiny process – perhaps set aside a budget and then allow the team to spend as they see fit.

12 Months

What can’t be fixed in twelve weeks will likely require a more substantial project. Perhaps you need a number of system improvements, perhaps a big-bang replacement. Either way, your streamlining leader must define specific outcomes and justify the cost of each and every project.

Similarly, if external vendors are involved, then a tendering process will be necessary. External projects are especially inclined to fail, so these too need to be planned, owned, and managed, with specific timetables and deliverables.

Each of these deadlines will help to keep everyone focused and energized. Whichever project is at hand, ensure that everyone remembers that your customers decide what matters – and if you don’t get it right, a competitor will!

One Last Thing: Create a Culture of Efficiency

Having a senior person with authority over the streamlining project ensures that it remains a priority. It also helps to shift the culture of a company.

More efficient systems will lower costs and increase customer satisfaction. At the same time, you are reducing stress and frustration for your people. And if you want to retain these benefits moving forward, you’ve got to set an example for your staff. If they see the CEO or CFO allowing poor practice, they too will be lax. If they see you working toward efficiency, they will be conscious of it as well.

Much of the cultural challenge may be for managers to listen to people internally, and for these people to feel safe to express their frustrations, especially when they involve their own jobs. You will know it is working when staff feel empowered to ask questions and make suggestions, so that down the line you do not have another mess of spaghetti to clean up!


Previous publications: 
Introduction: Succeeding in 2021 (and beyond)
Part I: Security and Compliance
Coming next: Back Office Streamlining


To find out more about how we could add value to your business, Contact Us and we’ll be in touch for an informal conversation.

Freeman Clarke is the largest and most experienced team of part-time (we call it “fractional”) CIOs and CTOs. We work exclusively with ambitious organizations and we frequently help our clients to use technology to beat their competition.

Part I: Security and Compliance

This is the first installment in our Financial Services Content Series. Have a look at the Introduction: Succeeding in 2021 (and beyond)

Let’s start on a positive note: when it comes to the mid-market financial services sector, we are bullish.

It is an indispensable industry, and the U.S. boasts institutional experience, high-quality companies offering innovative services, and a sophisticated, forward-thinking market. Whatever is in store for the economy as a whole, American financial services will remain a world player, and domestically it will remain critical to our institutions, businesses, and personal lives.

In our own recent experience, we are seeing real buzz in mid-market companies in a broad range of financial services areas, including:

Now for the hard part. We can’t have a clear-eyed discussion of financial services without acknowledging the deep effects of COVID-19.

The massive rush to telecommuting, in particular, exposed the security weaknesses and process issues of so many companies. We weren’t surprised when Deloitte reported a spike in “phishing attacks, Malspams and ransomware attacks” by criminals looking to take advantage of the confusion.

Another hard part: security and compliance issues are especially difficult in the mid-market space. It is subject to many of the same complicated regulations and cyberthreats as the giant multinationals, and yet mid-market firms don’t have the same resources to deal with these problems.

What follows is an overview on how mid-market financial services firms can handle security and compliance issues without punishing expense and at the same time increase efficiency, improve customer satisfaction, and fatten margins.

Data Security is the Cost of Doing Business

Data security is a growing problem, and it’s only going to get worse.

Verizon analyzed more than 150,000 incidents worldwide and confirmed nearly 4,000 data breaches in 2020. This is only what one company analyzed, and the year isn’t over yet! To make matters worse, around twenty-five percent of these attacks were in the financial services sector.

Why the explosion of cyberattacks in financial services? As the famous American criminal Willie Sutton said when asked why he robbed banks, “because that’s where the money is.”

More specifically, the rush to work-from-home has exposed the security weaknesses of many companies. Ten years of behavioral change were compressed into ten weeks; staff and IT teams weren’t prepared for it.

When we speak of security, however, we are not only speaking about what happens online. In our digital age, too many businesses aren’t careful enough about the connections between data security and what happens offline. Thieves no longer pilfer the mail for the checks, but to aid in identity theft. They steal smartphones not to sell the device for quick cash, but to use as source of inside data to help them find the soft way in for ransomware.

Remember: All the firewalls in the world won’t help if a thief gets access to the CFO’s email account! A lot of stolen cash is transferred willingly by authorized finance staff who believe they are following instructions from the real CFO but in reality, it’s a clever scam.

Another frequent lapse is how often businesses remain unprepared for disruptions, whether due to natural disasters or human error. The California Camp Fire of 2018 caused an estimated 86 deaths and $16.6 billion in losses. The current fires all over the American West will likely bring about even bigger losses of life and money.

It isn’t just forest fires. Experts predict that extreme weather events will become almost commonplace. Thus it is in your best interest to prepare your business for them. Just as you should prepare for other mishaps. A few examples of what we’ve seen with our clients:

In each instance, we helped our clients keep their doors open and recover. But it would have been easier—and less expensive!—had they brought us in earlier. Because we already knew that disaster preparedness is just part of running the IT function.

In the meantime, see our Technology Roadmap for Growth Knowledge Center

Find the Risks Before They Find You

The first step for a CEO looking to mitigate security concerns is to create a risk-and-issue log. This is simply a list of the risks and issues your company faces so that you can have a plan for when something happens.

For the log to be effective, it needs to:

Nothing should be off the table, even scenarios that seem extremely unlikely. In 2019, most Western businesses thought a global pandemic was completely ridiculous! But companies with experience of SARS knew it was very possible.

Once you’ve created the log, it needs to be maintained and managed. (There are few things more useless than an out-of-date risk-and-issue log.) Thus you absolutely must appoint a high-level executive as responsible for (a) maintaining the log and (b) mitigating the risks it has revealed. Without clear ownership and responsibility, the log will fade into the background. And then during the next emergency – because there will be one – the recovery will be longer and harder. That is, if your company survives.

Are we being too dramatic? Perhaps. The good news is that, as Freeman Clarke Principal Bruce Pomerantz points out, “It shouldn’t be burdensome to produce this.” It will of course take time and attention. But producing and maintaining the log is not an especially complicated process, and your business will be stronger for it.

Even the process of bringing the senior team together to identify and discuss the risks creates a common understanding, flushes out issues, and builds preparedness.

Compliance Comes with the Territory

Compliance, as you already know, means following the regulations of external authorities. An equally important part of compliance is proving compliance.

Before we get into more detail, let us remember that in financial services, legal requirements are nothing new or surprising. Just like data security, it is part of doing business in this sector. And when considered as part of a larger effort to streamline your systems and processes, it needn’t be prohibitively expensive or oppressive.

Compliance can even be part of your business strategy: for mid-market businesses looking for points of difference, there are opportunities for companies who can demonstrate their attention to compliance, as well as for companies offering compliance consulting and services.

Regardless, compliance is not going away, and it won’t get any easier. Companies in the financial services space already have to deal with federal, state, and even municipal authorities, as well as facing potential international exposure in the case of the Payment Card Industry Data Security Standard (PCI DSS) or the General Data Protection Regulation (GDPR).

Beginning Questions

A mid-market financial services business looking to shore up its compliance needs to first consider its weaknesses. Given the wide range of services that fall under the umbrella of financial services, the particulars will be individual to your own company. That said, here are areas in which we see and help mid-market companies streamline compliance:

Document management. Are you aware of the requirements for document management particular to the services you provide? For example, do you know how long you need to keep emails or any kind of correspondence? Do you have an automated system for backing up correspondence? Do your processes and systems automate retention and deletion compliance? How are you documenting employee participation in training programs?

Centralized vs separate teams. Is your data siloed or is it easily accessible between departments? Manual sharing can be labor-intensive, expensive and error-prone; clumsily managed data creates compliance problems and opens the door for fraud and malware attacks. And it is likely there will be missed opportunities for cross-selling and upselling!

Overcompliance. Are you following rules that have been rendered moot by more recent regulation? Have you been sold overly complicated software that is too difficult to use and doesn’t deliver value?

We don’t provide these questions to add to your general stress level. We do suggest you ask yourself if you may be lax or behind in these areas, so that you have a place to focus your efforts. Compliance has to be done with an eye on both regulations and the bottom line; the above questions may provide a good place to start.

Three Steps to Better Compliance

Of course, compliance is more than simply complying; you’ve got to produce regular, repeatable evidence of compliance, or face even more scrutiny—and potentially huge fines. Here is how to get started:

  1. Appoint someone at the executive level responsible for compliance. Mid-market businesses may not have the resources to appoint one person as a compliance officer. Nor does a CEO have time to take complete ownership of compliance. But someone at the very top level has to have the authority to get it done.
  2. Create a simple view of how the regulations apply to your business. Clear and streamlined businesses do compliance easily, and they provide better service and fatter margins. Simplicity and efficiency should be your goals and your guides.
  3. Take a sensible and business-minded approach to compliance. The overall goal is evidencing that is efficient, repeatable, and automated. Compliance experts tend to create very, very long lists of actions; so whoever you appoint internally to oversee the project must have a balanced, sensible, and business-minded viewpoint.

At the End of the Day…

So much of financial services is about personal relationships. In the end, security and compliance lapses put your reputation on the line.

The vast majority of cybercrime can be thwarted with basic security techniques and training. It is extremely unlikely that the authorities will come knocking if your evidencing is on point. And most physical disasters can be overcome with the right planning.

But something will go wrong. And when a crisis hits, would you rather be known as a company prepared for troubled waters, or a company that foundered?

One final note: It may seem overwhelming to have to consider compliance at the same time as data security! However, when you consider both as part of a larger effort toward streamlining your systems resulting in increased efficiency, improved customer satisfaction, and fatter margins it may seem less daunting.

Either way, if you have any questions about security and compliance, or how IT can drive growth for your financial services company, feel free to get in touch.

Previous publication: Introduction: Succeeding in 2021 (and beyond)
Coming next: Back Office Streamlining


To find out more about how we could add value to your business, Contact Us and we’ll be in touch for an informal conversation.

Freeman Clarke is the largest and most experienced team of part-time (we call it “fractional”) CIOs and CTOs. We work exclusively with ambitious organizations and we frequently help our clients to use technology to beat their competition.

Financial Services: Succeeding in 2021 (and beyond)

The financial services sector is a core element of every developed economy. Every institution you can think of is dependent on financial services, from corporations to governments. It’s at the heart of how we plan our own futures, from the growth of our businesses to how we best enjoy the rewards of our hard work, right now and in retirement.

The vital nature of financial services is one reason we are optimistic about growth in 2021 and beyond. The second reason is technology. While many CEOs see tech as a complicating factor, or perhaps a necessary evil, the wisest leaders are using it to drive growth and simplify their customers’ lives.

Of course, we can’t downplay the enormity of current challenges. In a few short weeks, the pandemic changed nearly everything about doing business, from where and how we work to supply chains and global markets. As individuals, we’ve gone from office workers to telecommuters quite literally overnight, with all the joys and stresses that implies. Globally, of course, markets are volatile, supply chains have been interrupted, and the very order is realigning.

These challenges are shared by mid-market firms and the biggest international banks. But in the mid-market, obviously, resources are scarcer. They don’t enjoy the same deep pockets or economies of scale. Nor can they afford to invest the same in expertise. Fidelity Investments reportedly spends $2.5B per year on technology and employs some 12,000 “technologists.”

Such numbers may seem daunting to mid-market CEOs. And while we understand their apprehension, we see a way forward. The fact is that many longstanding challenges in the financial services sector have an upside—and they are often easier to address in mid-market companies.

Integration. Financial service businesses are often hampered by unnecessary complexity, such as multiple systems that can’t talk to each other, requiring tedious and demoralizing labor from staff. The mid-market companies that streamline their systems and processes—improve integration with outsourcers, increase the accuracy and availability of information, and automate decisioning—will gain a clear advantage over competitors.

Compliance. There is nothing new about legal requirements. Although they have become more complicated, that just means even more opportunities for companies who do compliance well, and for companies offering compliance consulting and services.

Digital channels. COVID has only accelerated what was already happening, from contactless payments to securing a business loan online. Many scoffed at the idea of selling pension plans or insurance policies via Zoom; now it seems perfectly sensible to vendors and clients. Ten years of behavioral change have been compressed into ten weeks!

Disruption. Retail banks with long and proud histories may be swept aside by new entrants like Ally and Chime. If and when Amazon, Google and Apple get into financial services, the old corporate giants may topple. However, we still see room for nimbler mid-market companies that can compete on price or combine a range of services with a personal touch.

In the meantime, see our Cyber Security and Compliance Knowledge Center

The ultimate question for mid-market financial services businesses is quite simple: Given all the uncertainty, how do we maximize the opportunities?

In the coming weeks, we’ll be addressing this question with a series especially written for the CEOs of mid-market financial services companies. The topics include:

The series will help you identify the threats and opportunities in the coming year, and how to get started on minimizing the former and maximizing the latter. Above all, we aim to demonstrate that while there are serious challenges in the mid-market space, with the right technological strategies, they are more than manageable, and that there is room for mid-market players to grow in 2021 and beyond.

Coming next: Security and compliance.


To find out more about how we could add value to your business, Contact Us and we’ll be in touch for an informal conversation.

Freeman Clarke is the largest and most experienced team of part-time (we call it “fractional”) CIOs and CTOs. We work exclusively with ambitious organizations and we frequently help our clients to use technology to beat their competition.

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Graeme Freeman
Co-Founder and Director

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Plain English board-level briefings focused on technology strategies to deliver competitive advantage and business success.

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You can unsubscribe at any time.

Thank you.

You’ll now receive regular expert business insights.

Call us on 0203 020 1864 with any questions.