Financial Services

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Overview

For the past decade, the Financial Services industry has been shaped by regulatory compliance and reducing the risk of the next Great Recession. With the additional cost of regulation, many of these firms have driven great cost savings to preserve dwindling profit margins. While the wounds of these troublesome years still seem fresh, Banks, Insurance companies, Investment Managers and Commercial Real Estate Managers have new fish to fry. Innovators in Fin Tech are challenging the status quo of the old white shoe firms and attracting much of the talent previously reserved for blue chip Financial Services companies. After living and working for top-tier banks during the Great Recession and collaborating with Fin Tech start-ups in our consulting lives, DPO&Co is poised to support clients throughout the Financial Services space with a multitude of challenges. 

Case Example

8-Month Project: Built and managed shared service center for Finance and Risk departments of major Wall Street Bank in Eastern Europe during the heart of the Great Recession


Situation

  • Wall Street bank had several billions of dollars in write downs from bad bets on mortgage backed securities and was forced to accept TARP money
  • Increased regulation such as Dodd-Frank was further compacting negative profit margins, driving the bank to increase controls and aggressively cut costs
  • Higher volatility in markets was increasing the importance of risk controls, particularly in derivatives

Approach

  • Reviewed best practices for Business Process Outsourcing
  • Assessed activities within the Finance and Risk functions, bucketing into "Transactional", "Judgement" and "Knowledge Based"
  • Researched the most attractive markets for top global service locations and factored the bank's specific business process, cultural and support needs
  • Engaged team members across three global regions to analyze differences in procedures
  • Implemented a globally consistent framework that met several regulatory requirements and reduced operational risk
  • Designed roles with HR, interviewed 30 potential candidates, trained new hires and conducted mid-year reviews
  • Led monthly global presentations to senior business unit members and achieved buy-in for strategic enhancements  

Impact and Results

  • Reduced group overhead costs by 80% by centralizing activities in Budapest and transferred from the New York, London and Hong Kong offices
  • Met regulatory requirements ahead of schedule and reduced overall functional risk
  • Acheived higher service levels by sharing knowledge that was previously captive in regional offices