Inc. and a number of system integrators including Genpact to implement a first instance of ... back office supporting op
C ASE ST UDY
Genpact sets up and runs an investment bank’s “virtual captive”, delivers 600% greater trade throughput at 20% lower cost About the client The Corporate and Investment Banking group of one of the top 5 banks in Europe, amongst the top 10 banks in the world, with operations in more than 70 countries
Industry Capital markets
When in 2006, the corporate and investment banking arm of one of Europe’s largest banks, needed to reduce its risk profile by focusing on simpler ‘vanilla’ trades - they also had to ensure the volume of such trades increased significantly to offset the reduced profitability. With the limited back-office capability supporting this trade and it’s obsolete systems, it was challenge for the bank to cope with the rising volume of trades. So we partnered with Calypso to implement the Calypso trading application and create the core of a back office that would also meet future needs. Since then, this engagement that has grown from 10 employees supporting a single application to a team of 130+ consultants that support multiple business critical applications for the client’s trading operations in 5 global financial capitals.
Business need addressed • Centralize all trade processing: the bank needed to centralize all trade processing to ensure independence between ‘booking’ and ‘processing’ trades
Business challenge
• Rationalizing: the bank had multiple international platforms and its accounting systems had to be rationalized
• Inability of the systems to cope with a significant increase in trading volumes
• High cost and complexity of maintaining obsolete systems in the back office
• Scarcity of skilled Calypso experts needed to scale up delivery • Process trade volumes cost effectively: the bank needed a back office suite that could process higher trade volumes at a significantly lower cost per trade
• Unavailability of a partner with experience in supporting multiple platforms like Misys Summit, Kondor+, Murex and IntelliMatch in addition to Calypso
Business impact
Genpact approach
• Cost and margin pressure: Delivered upfront cost savings of 40% by setting up an offshored Calypso service center operating in managed services mode • Standardization and simplification: Year -on-year productivity gains delivered 20% cost savings over 3 years • Growth and scalability: Delivered the ability to process a 600% greater trade throughput
• Setting up a ‘virtual captive’: Genpact set up a virtual captive center delivering Calypso services in managed services mode, allowing the bank the benefits of scale not previously achieved in such a specialized area. • ‘Follow the sun’ location strategy: Genpact set up operations in four locations (New York, London, Paris, Hong Kong) to provide live on-site support for the investment bank’s traders on a 24*7 basis. This on-site support was available in French as well. Apart from the live on-site support delivered from these four global locations, all other services were delivered from the virtual captive based in India. • Lean Six Sigma approach: Genpact streamlined the process flows involved in back office trade processing and automated manual activities. This led to productivity improvements that minimized human intervention and increased the back office’s capacity to process trades.
Genpact solution
Business impact delivered
• Global, consolidated back office: The bank worked with Calypso Inc. and a number of system integrators including Genpact to implement a first instance of Calypso. Following this, Genpact took over complete ownership and rolled out Calypso internationally to form a consolidated back office supporting operations in 23 countries on a single software suite. In addition to processing all the asset classes the bank worked on, this back office solution also handled cash management and the interface with the accounting system used by the bank (Oracle ERP) for General Ledger entries.
Genpact helped the bank achieve its strategic objectives on both counts:
• Technology agnostic front office integration: Because of the specific requirements of regulatory bodies and local standards, the way front office systems were used and their underlying technology varied considerably from one market to another. So the bank required a standardized and simplified calypso solution to interface with a diverse set of front office platforms. Genpact configured the Calypso back office to process multiple asset classes, independent of the front office systems used like Kondor+, Misys Summit and Murex and a number of bespoke applications. • Operational excellence: Genpact applied its Lean Six Sigma approach to implement a number of productivity improvements that delivered the following outcomes:• 100% greater batch operations supported • 90% more support tickets processed • 33% more business users supported • 33% more geographic locations supported
• Reduced costs: Genpact helped the bank reduce the technology and operations costs associated with its back office trading technology on two counts. • A one-time cost saving of 40%: Genpact set up and ran a virtual captive that provided the bank access to a large pool of consultants working in managed services mode on niche, high end platforms like Calypso, Summit, Kondor+ and Intellimatch from an offshore location. This was the first case of such high-end skills being delivered in managed services mode from an offshore location. The bank, like all other investment banks, had only worked in staff augmentation mode with IT vendors or with freelance consultants on these niche skill sets. This led to a one-time cost saving of 40%. • Productivity gains yielding 20% cost saving: Over a period of three years, Genpact focused on operational excellence and delivered a number of optimizations that yielded a further 20% cost savings. • 600% increase in trade throughput: By streamlining the process flows in back office trade processing and focusing on straight through processing, Genpact delivered a 600% increase in trade throughput capacity.
• Straight through processing: Genpact implemented lean, streamlined processes with which the back office started delivering a 600% higher trade throughput.
About Genpact: Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations. We help clients become more competitive by making their enterprises more intelligent: more adaptive, innovative, globally effective and connected. Genpact stands for Generating Impact for hundreds of clients including over 100 of the Fortune Global 500. We offer an unbiased combination of smarter processes, analytics and technology through our 60,000+ employees in 24 countries, with key management based in New York City. Behind Genpact’s passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for 15+ years. For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn. © 2013 Copyright Genpact. All Rights Reserved
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