Case Study

The Journey to an Integrated Service-Based Business Model

Over the past 5 years, one of Germany’s largest banks has undergone a transformation programme. The aim of the programme was to revamp the wealth management unit’s operating model from siloed IT & back offices across multiple booking centres to a global, standard, integrated service-based business model. The successful business transformation was achieved through close collaboration between the bank, Avaloq and Orbium.

Situation

The unit was looking to simplify their operating model and put more focus on their core competencies in advising clients while also addressing the industry pressure on margins. The project needed to cut the high cost of delivery of change, reduce operational risks and address ongoing regulatory changes effectively. This would enable the firm to focus on its core competencies and react to the industry pressure on margins.

Outsource non-core services – Delivered in an environment with disparate systems and few cross-business unit synergies, saw marginal value added.

Cut high cost of delivery & duplication of efforts – Many tasks were duplicated across middle & back office functions, which meant more complex change initiatives and expensive business as usual processes.

Reduce operational risk – More systems, more people & more bespoke processes meant more operational risk.

Address regulatory changes effectively – Regulatory requirements were not efficiently addressed which lead to higher costs of compliance and tied up resources.

Enable focus on core competencies – The business saw little value add in delivering non-core services and was unable to easily leverage the capabilities of the wider group.

Impact

The results have been striking with better performance and significant cost efficiencies across multiple dimensions in six booking centres. Processes have been standardised; cost reduction has been achieved within three years; efficiency and straight-through processing (STP) levels have been improved through automation; and flexibility has been integrated, allowing timely changes to the client offering.

Benefit

From an isolated business unit of parent bank, the Wealth Management business is now fully integrated. Its new simplified model, including outsourced non-core operations, has helped reduce both costs and risks. The business can now truly scale thanks to common, harmonised processes across different regions and benefits from enhanced governance and oversight.

Enabled by the new Avaloq system, straight-through processing now accounts for more than 90 per cent of regulatory and operational tasks, and provides a vastly improved customer service with cross-selling and new products and services.

Orbium’s Role

  • Project Management from Project Setup until Build
  • Business Architect role
  • Stream Leader for Front Office, Securities Operations and Finance

Areas Covered

  • Project Management Securities Operations Front Office
  • Cash Operations Data Migrations Finance
  • Regulatory Reporting.

Results and Deliverable

  • Successful delivery of the first full Avaloq implementation in the UK with a rapid Go-live in 14 months
  • Responsible for the overall business architecture, member of the Steering Committee
  • Responsible for the delivery of the major UK specific interfaces (i.e. CREST, IDC, FIX)
  • Key role in data migration stream with leverage on Orbium Proprietary Data Migration Tool (ORCAT)
  • Planned to support the client with subsequent enhancement and business improvements post Go live

“ The programme has enabled the business to innovate & provide an enhanced customer offering, become more agile to change, and reduce both risks & costs. ”