Case study

Financial services company fund investments

A financial services company found $600 m in efficiencies and the ability to fund investments in differentiated capabilities.

^{_{Industry: Financial services

Services: Consulting

Country: South Africa}}

Situation

A financial services company (a securities servicing leader that monetises its front-, middle- and back-office capabilities) faced challenges in the macro-economic environment and experienced issues in the cost, scalability and quality of service delivery. As part of the strategic cost management initiative, the firm wanted to achieve ~ $600 m in run rate savings.

Key issues

Client faced a challenging macro-economic environment (increasing compliance complexity and increasing regulation decreasing profitability of core services such as securities lending).
Services were limited in their scalability (growing complexity, one-off reports and inflexible systems limiting profitable growth; operating model relying on many small manual groups that could not be efficiently scaled).
Customers experienced inconsistent service delivery (clients increasingly demanded more complicated and timely service delivery; lack of standardised products and communication within and across business units).
Client had a high cost to deliver services (lack of standardisation processes across clients, high number of manual processes, increasing customisation for clients).

Strategy& contribution

Four key levers were used to deliver savings and transform the operating model (process transformation, consolidation and infrastructure rationalisation, span/layer and staff/skill optimisation and digitisation).
The levers were applied across both operations and technology teams to
drive transformation.
We standardised 15 critical end-to-end processes to take out significant cost and created high-value centres of excellence.
We applied a data-driven, lean-led approach that ensures broad and sustainable results.
We transformed technology through demand management, including zero-based application support and development.

Results

Overall, our process transformation efforts significantly reduced risk while increasing capacity by 25%.
Utilised lean methodologies to design an operating model that ensures core functions are aligned with client needs.
Sustained investments in capabilities to accelerate the development of leading-edge solutions for its clients.
Expected to achieve annual pre-tax run-rate expense savings from these actions of $575 m – $625 m by the end of 2014.
Designed a robust implementation plan to ensure that the capabilities were embedded, working with local experts.