Consolidation, collaboration and increased efficiencies in IT and communications will be the keys to shaping the future for businesses, especially those in the financial services industry. In a sector that has grown through acquisitions and mergers, the survivors have been left with a legacy of disparate systems, applications and infrastructure.

The institutions had wanted to control IT and communications themselves even if that involved massive staff costs and, driven by growth, they paid little attention to IT managers’ concerns about “network architecture”. So when things started to go wrong they were positioned badly, with processes and risk management systems insufficient to make informed decisions.

Change was inevitable and consolidation is already reshaping the financial services industry, with the disappearance of some brands from our high streets forever.

But how can today’s players ensure that they come out of the recession in good shape at a time when capital expenditure is very tight and tougher controls are on the way?

Andy Nicholson, BT’s vice-president global banking and financial markets, says businesses must find the correct balance between being lean and being positioned to maximise the opportunities of the upturn.

“They need integration of systems, processes and infrastructure to get the right level of information in a timely and consistent manner to be informed and make controlled decisions,” he says.

“The priorities are to consolidate, reduce suppliers and generate efficiency and cost savings. For BT, with 25 years’ experience in the financial markets, this is a great opportunity.

“We have already seen an uptake in business coming to the market, contrary to what might have been expected. But it is a tough and challenging market. Return on investment will continue to be a defining factor. It was talked about but seldom delivered and now it plays a critical role in decision making and delivery. I don’t see this changing after the recession fades from our memories.”

Among the areas where integration and efficiencies can be achieved are contact centres, which most banks developed in-house. They bought hardware and software from vendors and hired service providers to maintain them. The trend now is to use specialist companies with sophisticated systems and highly-trained staff to provide the services back to the banks.

Investment banks are looking, if they do not have them already, for solutions that link them to the main trading venues and information providers and transfer data in milliseconds because speed of information is essential.

With value for money uppermost in every business executive’s mind, BT is eager to offer services that connect everybody everywhere. Popular applications include telepresence, which enables individuals and groups in different locations to talk to one another face to face, and web-conferencing, which allows staff to work on the same document on the same screen wherever they are based.

Nicholson says: “The approach is to extend the networks to include a whole raft of applications that are normally done in isolation.

“We have to be very focused on what we are good at, stick to it and make sure that we meet the top issues facing the financial institutions. At the same time we should consider reengaging projects that we had planned but had to stop because of the recession and decide whether to approach them in a different way.

“The organisations that will succeed will be those whose business strategy is underpinned by robust IT networks and sound technology.”

Crisis in a nutshell

“We had an illusion of prosperity, based on greed, and now we are going to have to correct that because it was an illusion; it was not the real world.” Sir Brian Pitman, former chairman of Lloyds TSB

“The one thing that characterised the crisis for everyone was speed. For example, the entire decision to nationalise the Irish banking system was taken in three to four hours late at night in Dublin.” James Harding, editor, The Times

“We are losing the hearts and minds of the young people who should be shaping our future.” Claire Fox, director, Institute of Ideas