The Right Solution For the Right Job

An emerging market technology strategy should depend on the type of banking operation the bank is considering.

More complex capital markets knowledge, hedging and trade finance strategies, and cash management facilities, as well as application of tax-based services, all provide entry opportunities. Establishing joint ventures with local banks in these markets can allow global banks to provide their expertise while leveraging local banking connections and regulatory capability.

The significant risks relate to regulation and local compliance, transparency of operations, and the variety of specific market needs relating to the banking transactions themselves. The key to addressing many of the risks can be to work with technology already adapted to the market. But the simple imposition of locally tailored solutions onto existing infrastructure in the bank may create more risks than it solves.

The reality is that a technology strategy depends on the type of banking operation the bank is considering. All strategies, though, should combine key elements of international compliance and transparency with adaption to, and specific functionality for, local workflow and operational needs. For example, in the core banking space, the volume of business in China means that introducing a platform built solely outside of the market would likely not provide the scalability required. The best approach is to make sure that you work through what services you ultimately need to provide and then establish a road map combining both existing solutions as well as solutions that have been adapted to local market conditions.