Back to the future for IBOR

The complexity of the investment management industry is growing and the data that needs to be analysed is richer than ever before. This is a consequence of the thinning geographical boundaries within portfolios and the search for alpha that drives managers to incorporate different and more esoteric asset classes within a single portfolio.

The impact of this changing environment has been a resurgence in the industry's use of the Investment Book of Record (IBOR), a central and comprehensive source that tells the complete story of a firm's portfolio activity. An IBOR provides a timely view of a firm's exposures, portfolio positions and cash. The fullness and clarity of the picture it paints means that it provides the intelligence and insights on which many portfolio decisions are made.

Challenges to implementing dynamic pricing in financial services

Legacy IT systems

The roadblock to real pricing execution lies in bank legacy core systems. Just a reminder, legacy systems are costly. A study by IBM suggests that rigid legacy systems cost the industry $200 billion annually, and siphons off roughly 20% of pre-tax profits. 

Let that sink in for a moment. 

Banking is a battlefield

• For anyone who wasn’t around for the 80s, any karaoke bar experience virtually guarantees that the Pat Benatar tune 'Love is a Battlefield' comes to mind when anything is called a 'battlefield': banking included.

Sad thing is, when it comes to core banking systems, legacy status means any claim of 'we are young, we are strong, no one can tell us we’re wrong' is laughable at best, an utter lie at worst.