COLUMN – OLAF RANSOME | Human capital is overrated – at least when it comes to operations in finance. People quit jobs and they forget things. To ensure continuity in processes that hold up despite flawed memories and staff movements, Olaf Ransome believes nothing beats good old-fashioned discipline and controls. He delves into how to build these qualities in organisations.
Through a series of six column articles for PostTrade 360° in 2025, banking operations veteran Olaf Ransome digs into everyday operations – seeking to help us understand some of the everyday challenges and how to master them. Find Olaf’s articles indexed here.
“Olaf. We have a mess with our core processing system. Our operations people don’t know how to use it properly and as soon as they hit a stumbling block, they call us in IT, fully expecting us to know what to do and solve their problem. They are forgetting key controls, and my IT team is being tied up providing basic support.” That was the start of a recent conversation with a CIO of an investment banking division.
The message doesn’t get passed on
To help my friend, we delved into the symptoms and the causes. First, symptoms. In simple terms, the procedures were not being followed, and in some cases, were not even known, which led to errors, which led to less capacity and to frustration, which led to operations people leaving, and then the replacements knew even less. The operations people kept calling the IT people for help, which meant IT was doing support rather than their normal development work. Ops was taking the view that IT owns the systems. The ops team was, and still is, just slogging through each day. Both operations and IT find themselves in a tunnel, with the light of an oncoming train really likely to just be bringing the next operational error. All around there is no spare time or capacity to invest in doing things to make improvements.
We then talked about the causes. About eight years ago, the bank introduced a new core processing system in IB operations. An established platform was bought from a vendor. As part of the integration, a “train the trainer” approach was used. It was very much the standard thing; the vendor’s SMEs train one or two of the bank’s folks to be the experts or super users – call it whatever you want. Those trainers then trained the rest. I have seen this before; the trainer explains, the trainees make their own notes and then go off to do the day job. The day-to-day operations rely on these newly trained heroes. Then there is some staff turnover, and like in a game of Chinese whispers, the quality and clarity of understanding how to do things just deteriorated. My friend the CIO said that in the eight odd years since the start of the implementation, they are now on the sixth generation of ops staff.
Don’t call mum
My wife and I have two grown up kids, both out of the house, though still somewhat on the payroll of the Bank of Mum and Dad. Quite a few times they have regaled us with stories of how they figured out how to do something or other by looking at a couple of videos on YouTube; ironing for one. There is also the “24 Hour Concierge Service of Mum and Dad”, which is a wholly owned subsidiary of the Bank of Mum and Dad. It runs on WhatsApp, supporting myriad asks such as “please send money”, “do you have a PDF of my Swiss passport”, and so on.
YouTube videos won’t readily work in a financial institution. Even if the videos were internal and specific to the particular business, the availability of some videos will not ensure people follow the same, correct process every day. And the WhatsApp thing I joked about is the same as operations folks just calling IT every time they are stuck. It can be done, but not a well-controlled way to support a business.
No single hero
“Our people are our capital!” I disagree. Well mostly. If you are Warren Buffet’s banker at Goldman Sachs, then you are the capital. If you are Mo Salah at Liverpool, you are most of the capital, but you do need a whole team of coaches, fitness trainers, physios and nutritionists to keep you in shape for a 50+ game season. And you’d need some talented team mates to pass the ball to you.
Many private bankers overestimate their ability to take clients with them to a new bank which will promise them big salaries, guarantees and golden halos. Right now in Switzerland there is a widespread bout of rude awakenings with banks realising that the teams they snapped up at no small expense from the collapsed Credit Suisse are not able to bring many of their clients with them. Cost/income ratio is through the roof, there’s egg on face and a lot of fixed costs that are hard to cut quickly.
Human capital is a part, not all, of the solution
The way I see it, financial institutions need good controls and these are a function of people + processes + tools. You could say systems; I just like tools. “Train the trainer” is for me simply the wrong approach. I would say it should be “create the procedures and checklists, then make sure they are thorough and up-to-date and supported with the right tool.” Written procedures are a good start. That said, a verbose 50-page document is not necessarily helpful. There is an enormous handbook in the glove compartment of my car; if I do not know the exact term I am looking for, it is not much help. I don’t use it.
If you are in operations at a financial institution, you need a checklist; what are the 23 things I have to do each day, what is the extra thing on Fridays only and the two extra things at month-end? Now most days, the checklist is all we need; the team knows what to do. But, if you get stuck at step six, you need details, because the person who normally does step six is not in, or you can’t remember what you did the last time things went wrong at step six. At that point what you really want is to point and click at step six on your checklist and immediately see all the details you need.
If you are in a business such as a hedge fund, or even hedge fund administration, you will have folks doing due diligence on your capabilities. When they ask about your controls, you will get a much better reaction if you can point at your process and tools and show them exactly what you do than if you say, “Fred does all of that, been here for years, superhero.”
“Even the coolest AI will need help to work out what to share with you in answer to “please give me the details of step 12”.
Very theoretically, you could throw some AI into the process: “what’s the next step please?” and “please give me the details of step six,” and maybe at 10:15 if you have not marked step seven as completed, an alarm goes off. Sure, but for my money, the work is the work; you still have to write things down and define a checklist. Even the coolest AI will need help to work out what to share with you in answer to “please give me the details of step 12”.
Organisations can help themselves with basic good discipline and leave the AI for now. If you have not got great tools, with all your procedures and checklists captured, then simply putting an AI badge on something to be in fashion is not really going to help.
Actually, some years back, I helped the bank where the CIO works with its CLS related processes. We built a great tool for checklists and procedures. Back then, the whole thing had to be coded by IT, which reduced flexibility. The controls, with the tool, however, are still in place and still get rave reviews.
Own the process
Today, we don’t need to custom build everything. Nor should we have a set-up where absolutely everything relating to a tool or system has to be done by IT. In fact, that CIO said, “Now we want to buy the tech to literally put this all on a smart phone or web application and let the operations people own those checklists and procedures.” I would say, tech is cheap; there are many specialist providers and you can get a lot for very little.
For me, at least in day-to-day operations, good processes and tools eat AI for breakfast. The basic building blocks are:
Create
• A “daily” task list which dynamically adapts to extra periodic tasks
• An ”on demand” list – the N things to do for a new issue
• Allow multiple people to work on one or more lists
Basic controls
• Add deadlines
• Link procedures and back-up plans to the specific task
• Escalations via e-mail or text if not completed on time
Audit Trail
• Daily, what was done, when, and upload evidence
• Changes, approval process, audit trail of who and when
To help my CIO friend, I introduced him to Daymi, where I am the global ambassador. If it were Swiss, Daymi would be the best tool since the Swiss army knife. As it’s from Sweden, I’d say it’s the best thing since IKEA.
Now my CIO friend just has to find a way to get the over-busy IT folks to stop and invest in better.
