Theorem Insights:

SaaS Solutions Play a Vital Role in Business Continuity for Financial Services Companies

One of the most significant trends in business over the past 15 years has been the rising number of Americans working remotely. According to Flexjobs.com, the number of employees based outside the office increased by 159% between 2005 and 2017, and today close to 5 million U.S. employees work remotely. Many factors make this an attractive option for companies, particularly the benefit that comes through cost savings. However, the capacity for employees to work remotely is also critical in terms of business resilience and is a vital part of any business continuity plan. The current Coronavirus epidemic has made this abundantly clear as firms respond to rising infection rates by asking employees to work from home.

Many financial firms remain tied to location-dependent legacy systems

Many financial services companies face considerable challenges in facilitating remote work, particularly for back-office functions. Legacy software systems are often installed on-site and data access is tied to a physical location, preventing employees from working at home or as distributed teams. Moreover, collaboration and communication between colleagues can also be difficult. Some types of activities, commodities trading, for example, do lend themselves more readily to remote work and these businesses need a post-trade solution that matches their flexibility.

The development of cloud-based SaaS (software as a service) software has been integral in making remote access feasible for financial services firms. Users of SaaS software simply connect to the Internet, open a browser, and enter an application URL. Once they log in, they’ll have complete access to all the program’s features and stored data. Employees can connect, collaborate and access data from anywhere in the world with an Internet connection. With this type of capability, a firm can continue operating even when disaster strikes as employees access systems from home or disaster recovery sites.

Regulators mandate business continuity plans, with remote capabilities crucial components

FINRA mandates that every financial services firm has a business continuity plan that will enable it to meet its obligations to its customers. Resilience strategies must make it possible for a firm to continue operating effectively in the face of disruptions that could preclude access to their physical premises.

SaaS providers also need robust business continuity plans

While SaaS solutions appear to be an answer, it’s also vital to ensure that the provider has a continuity plan in place to restore service in case of disruption. SaaS solution providers may have vulnerabilities of their own. Do they have a physical data center that could be threatened by a loss of power or connectivity? What is the likelihood of hardware failure? Are there backup systems in place? Do they replicate your data in multiple locations? Do they conduct regular disaster recovery tests, and are reports available to clients?

Theorem offers a SaaS-based post-trade processing solution

Post-trade processing and back-office systems are vital to a firm’s ability to function. A system must function in a way that is consistent with business operations, making it possible to access and manipulate data from myriad sources and maintain control over the business cycle. Theorem’s solution, with its web-based login and dashboard, frees companies from the tyranny of office-based installations, making it possible to carry out every aspect of post-trade processing from the location of your choice.

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Rebecca Baldridge, CFA, is an investment professional and financial writer with more than 20 years of experience in creating content and research for asset managers, investment banks, brokers and other financial services clients. She’s worked for some of the biggest names in the industry, including Merrill Lynch Asset Management, JP Morgan Asset Management, BNY Mellon and Franklin Templeton. Rebecca also spent 9 years as an analyst and director of equity research in Moscow, working for several Russian banks. In late 2019, she founded Quartet Communications, a boutique communications firm serving financial services clients. Her writing has been published in outlets including Pensions & Investments, MSNBC.com, Inc. magazine, and Investopedia.com. She holds a B.A. in Russian from Purdue University and an M.S. in Finance from the Krannert Graduate School of Management at Purdue.

 

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