How Capco optimized the client base of a tier one bank to deliver real $ benefits

INTRODUCTION

In a backdrop of cost reduction, ongoing remediation and a continued expectation of revenue growth our client engaged Capco to identify clients that were no longer commercially viable for the business and to help realize cost benefits through a reduced renewal book and remediation effort. This required us to work with the client to understand the ‘cost to serve’ for their clients and then to define minimum revenue thresholds, as well as identify ‘signs of life’ for dormant clients.

A global client segmentation was performed, which identified a scope of potential client streamlining opportunities. We defined and implemented a client review process across RMs, Product SMEs as well as key operations functions in order to identify non-commercially viable clients. In parallel we defined a globally consistent client off-boarding operating model that we were able to process non-commercially viable clients through as well as those risk-driven exits.

WHY NOW?

A key driver was to create more time for front-line staff to focus on more value-add activities and growth clients. Compounded with a tight remediation agenda, our client’s front-line and operations staff were investing a significant amount of effort in remediating and renewing clients that were in fact costing the bank more than the revenue they were bringing in.

HOW WE DID IT

Capco provided a blend of skillsets to achieve a significant cost reduction in what was a particularly sensitive domain. Together with the bank, we optimised the approach during execution, and we perfected the approach over time, and we got over obstacles as a partnership:

  • We identified and consolidated the golden source of client, revenue and product data
  • We resolved issues and blockers and defined longer term control frameworks
  • We took time to understand what a client means to each party, from RM to Product functions
  • We drove accountability across function and division heads
  • We provided real-time, simple MI on progress
  • We engaged the business, risk, legal and compliance to get the right client experience
  • We dedicated time and focus to the regions as well as global teams
  • We brought a combination of best practice & pragmatism to define operating models that actually work
  • We were able to tie real $ benefits to the programme outcomes through transparent MI

WHAT WE DELIVERED

Capco delivered a programme that saw c$16 million of net run rate saves realized. The client was able to streamline the client base significantly which led to opportunities to achieve cost reduction opportunities across operations and key functions. We didn’t just do this as a one-off; we established BAU processes to repeat and importantly to embed the key principles across the front-office, such as, “Is my client making enough money” and “Should this client be renewed?”

For more information about this project, and to understand how Capco can help your organization, please contact David Beale.