Effective Product Control

CHAPTER 2Changing Landscape of Product Control

Product control has undergone significant change over the past decade, all of which shows no sign of reversing. In this chapter, we will explore what changes have occurred and consider the drivers behind each of those changes. The primary changes are illustrated in Figure 2.1.

Figure 2.1 Changes in product control

Offshoring

Whilst banks have always tried to run lean operations, since the global financial crisis (GFC) revenue pools have generally declined, capital requirements have increased, governments have introduced new taxes on banks and more restrictive trading directives have been introduced by regulators (e.g. Volcker).

All these factors make costs a critical issue and have necessitated that product control, along with other functions within the bank, become leaner. This trimming has occurred through a variety of methods, including outright job cuts, standardizing processes and transferring more work to cheaper locations.

Standardization describes aligning multiple processes into a single or fewer processes. The objective of standardization is to reduce complexity by simplifying operations, whilst reducing operational risk and the bank's cost base. This shift has generated efficiencies for the banks (i.e., cost savings), reduced complexity and been a key ingredient in the success of moving work to cheaper locations. ...