Yorkshire Building Society (YBS), the UK’s second largest building society, and HP Enterprise Services yesterday announced the establishment of a Shared Service alliance to provide other financial institutions with a cloud-based IT platform to run their operations, supported by the YBS subsidiary, Yorkshire Key Services.
The rapid changes in technology, regulation and the financial markets have created many opportunities for financial services companies and trusted brands while at the same time raising the bar in terms of the necessary investment in IT infrastructure and expertise. YBS set up the Yorkshire Key Services operation in 2001 to support other, smaller companies in the savings business by providing core system solutions and administration services and at the same time to reduce its own cost base.
This strategic initiative has taken another step forward with the HP announcement. Yorkshire Key Services and HP will now be able to offer alliance customers access to a scale-advantaged IT infrastructure with flexible capacity on an opex, rather than a capex basis, built on the Virtual Private Cloud, sourced from HP Enterprise services. HP will deliver a wider portfolio of fully-hosted core applications for retail finance services such as mortgages, savings and regulatory reporting.
As more companies enter financial services and as established players seek to further reduce costs, this approach will gain momentum. YBS and HP will both be able to deepen relationships with the alliance customers and build annuity revenue. As usage of this service grows, cost savings should increase, providing a win-win for all the participants.
This model could be copied by those companies in the Financial Services sector which provide administration, settlement and regulatory reporting services for others in their respective market sectors.