Never have the challenges of creating operational efficiency and profitability within transaction banking been greater. Where the core transaction services are becoming more and more commoditised, and competition intesifies, delivering profitablity has never been tougher.

With market changes, such as new regulation and clients becoming more sophisticated in their needs from transactions services, many financial institutions are being forced to reengineer their operating models in the context of the broader strategic business requirements.

Alignment and synergies are being sought between the different business units to deliver increased capacity and greater efficiency levels. To achieve this requires a detailed review of processes by function and products. The key drivers will be different for each bank however with tightening of regulation, decreased operational risk, improved controls and predictability of new business are also receiving greater attention within any such process review.

When defining the future state operating model key objectives vary by markets and institutions, however the priorities are typically very similar, which include identifying:

• Processes that are eligible for outsourcing or off-shoring
• Expectations for improving efficiency of processing capability
• Opportunities for service centralisation
• Required controls across the infrastructure / capabilities
• How to minimise operational risk profile
• How to minimise duplication of processes and infrastructure
  

Capco’s industry professionals have worked with many clients that have sought to develop a target operating model to deliver against the business strategy, whether it is to support new business growth, refocus of operations, or to support post merger integration activities as well as reducing overall costs.