by Philip Ballard
The Board of Directors has approved DTCC’s 2013 corporate goals, which together with the Balanced Business Scorecard provide the basis for assessing the company’s overall performance and contributions to the industry.
This year, DTCC took a new approach to the development of its goals by defining five themes to serve as an organizing framework. The themes align with the company’s mission and vision and reflect DTCC’s expanded leadership role in the industry. For each theme, DTCC identified two to five goals along with specific initiatives that will be executed to attain each goal. The company has also created quantitative measures and targets to track progress toward achieving all goals.
“We developed this framework to give our Board, our clients and our employees a clear, comprehensive context for what we are doing,” said Michael Bodson, DTCC President and CEO. “The themes are strategic and expected to endure for several years, while the goals will be re-assessed on an annual basis – and some will span more than a year.”
Both the framework and the goals directly address the changing industry landscape and the issues confronting DTCC’s clients.
“During this period of dynamic change, our clients must manage the challenges of a rapidly evolving environment and ongoing fiscal pressures,” said Bodson. “Our new corporate themes are designed, foremost, to reduce risk for the industry and also to advance the most promising and cost-feasible infrastructure solutions that will help reduce costs, enhance efficiencies and optimize capital for our clients.”
Here are the five themes.
Reduce Risk for the Industry
We protect our financial markets and systems as a whole. We leverage our scale and expertise to promote solutions that systematically reduce risks within DTCC, for our clients and for the industry at large.
Goals that support this theme include completing delivery of the Global Trade Repository for over-the-counter derivatives and strengthening the CICI Utility’s capabilities and global reach. The CICI Utility is the Commodity Futures Trading Commission (CFTC) Interim Compliant Identifier Utility, developed with SWIFT to help firms comply with CFTC swap data reporting regulations.
A major goal within this theme is to develop state-of-the-art risk management capabilities. This includes a Board-approved, multi-year strategic initiative to transform DTCC’s Enterprise Risk Management’s systems infrastructure, which positions the company at the leading edge of risk management practices across the industry. Other goals include strengthening the company’s capabilities to withstand advanced and persistent cyber-threats, and to advance intraday settlement finality in the U.S. markets through enhancements to the settlement process.
Strengthen DTCC’s Core Capabilities
We take our vital role as the backbone of the financial market to heart. As a trusted leader, we provide solutions to safeguard the market and instill confidence in the future. We leverage our scale and expertise to foster a more robust, unified infrastructure that reduces risk, amplifies operating efficiency and minimizes cost.
Within this theme, goals include enhancing existing products to reduce the industry’s risk and cost, while enabling the adoption of industry standards. The company plans to further strengthen and modernize its IT infrastructure and capabilities, including hardware and software applications, as well as technology risk management and human capital competencies. Other capabilities to be strengthened include data governance, DTCC’s capital framework and strategic financial planning.
While these examples are not exhaustive, all initiatives that fall under this corporate theme foster a more robust, unified DTCC infrastructure.
Demonstrate Strategic Thinking And Thought Leadership
Our broad perspective of markets gives us a unique vantage point to provide critical insights and drive innovative industry solutions. In an ever-changing world, we anticipate our clients’ needs and cultivate ideas that help mitigate risk, reduce costs and create efficiencies.
Goals for this theme are to implement strategic initiatives, including the launch of a new Global Middle-Office Utility that will allow firms to outsource to DTCC certain processes that do not provide a competitive advantage (such as post-trade allocation and setting up client data) and the rollout of a Collateral Processing Utility pilot. Both of these initiatives will be advanced with industry support.
Another goal is to lead the discussion and implementation of systemic changes that will reduce risk and costs in the U.S. securities markets, including dematerialization and shortening the equity settlement cycle. DTCC will also focus on strengthening industry relationships and enhancing client outreach and education.
Strengthen Regulatory Engagement And Relations
As a proactive and objective partner, we collaborate with our regulators to reduce risk, solve today’s challenges and meet the demands of an evolving marketplace.
Over the past several years the company has taken significant steps to strengthen regulatory engagement and relations. “As global regulations continue to evolve and market events become more frequent, this working relationship will become even more important to DTCC’s ability to operate,” said Bodson.
Goals for this theme include enhancing regulatory relations through education, reporting and transparency with regulators, as well as ensuring DTCC is in compliance with new global regulations.
Strengthen Employee Engagement
Our employees are our most powerful asset. Their motivation, accountability and high performance enable us to fulfill our critical role in the world’s financial markets. To maximize engagement, we foster a collaborative and inclusive environment where diverse ideas and viewpoints are encouraged, and employee capabilities are developed through education, staff mobility, career growth and succession planning.
Goals that align with this theme focus on improving employee capabilities and strengthening engagement and partnerships across the company. Initiatives that will address these goals include greater staff mobility, flexible work arrangements, developing bench strength and fostering a culture of collaboration and inclusion that encourages diverse ideas and viewpoints.
A strategic vision
“DTCC’s corporate themes set the company on a trajectory towards greater risk reduction and cost efficiencies for the industry and will help create a more transparent environment over the long term for all market participants world-wide, across asset classes and financial instruments,” said Bodson. “We are confident the strategic vision outlined in our corporate themes will help the industry meet its most pressing challenges today while shaping positive outcomes for the future.”