Eversheds Digital Banking Seminar
Obtaining the right technology
30 September 2015
Eve England
Principal Associate
Overview
−Why is obtaining the right technology
important?
−Digital platforms - investment and strategy
−Facilitating innovation
−Getting the contract right
−Maintaining a competitive edge
Eversheds LLP |
Why is this important?
Gough, Partner
−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
Eversheds LLP |
Digital platforms – investment and strategy
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
Eversheds LLP |
Facilitating innovation
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
Eversheds LLP |
Facilitating innovation (cont’d)
−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
Eversheds LLP |
Getting the contract right
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
Eversheds LLP |
Getting the contract right (cont’d)
−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
Eversheds LLP |
Getting the contract right (cont’d)
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?
Eversheds LLP |
Getting the contract right (cont’d)
− 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?
Eversheds LLP |
Maintaining a competitive edge
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?
Eversheds LLP |
Summary
No team is an island!
Eversheds LLP |
Questions?
Principal Associate
Eve England
+44 782 798 7823
[email protected]
Eversheds
1 Callaghan Square
Cardiff CF10 5BT
eversheds.com
©2015 Eversheds LLP
Eversheds LLP is a limited liability partnership