Achieving back office efficiency with front office differentiation

Transcription

1 Achieving back office efficiency with front office differentiation Jean-Philippe Bailly, Nordea Bank Luxembourg Michel Jongen, Temenos Hervé Maillot, Deloitte 19 May 2016

2 Agenda 1. Highlander background 2. Temenos solution 3. Implementation process 4. Business benefits 5. Future plans

3 Highlander background Jean-Phillipe Bailly Chief Operating Officer, Nordea Bank

4 Context

5 IT Infrastructure at the time Core Banking Software Products Core application components: Olympic, WealthSuite Front Office and U-Link and satellite applications to support the private banking and custody activities Locations to support: Luxembourg, Switzerland, Singapore Mandatory Olympic migration was needed from the current version at the time, which offered no new and improved business functionalities. And the maintenance for it would ve been ended within two years and quite costly. WealthSuite Front Office upgrade to the next version (complex project to take on since the current one was highly customised) In-house developed CRM (CIS), e-banking, Data warehouse. To maintain, it would ve meant to heavily invest into our resources

6 Do we migrate to the new version of Olympic? Higher Cost Crossroad Questions OR Replace it with a totally new core banking system?

7 IT Infrastructure at the time Ageing Business Computing Infrastructure: IBM/AS 400 At 7 years old, it had already surpassed the industry s standard life cycle (5 years) by two years. Huge Investment as IBM AS400 and related hardware: higher cost to compare to the Intel Server.

8 Stay on IBM AS400 infrastructure? Higher Cost OR Change to a new infrastructure; Intel Server?

9 IT Infrastructure at the time Bank s Geographical Operations Our applications licenses covered only Luxembourg, Switzerland and Singapore. What about new markets? We could no longer rely only on our traditional markets as our customers aren t just banking from core market locations.

10 Deploy operations across the borders? Higher Cost OR Manage new markets from the Bank s hub; lowering IT footprints?

11 Additional drivers

12 Client s Perspective Improvement of Front Office activities finding a solution that would reduce multiple applications accesses to an integrated Private Banking Workspace. Increase of core value proposition finding a solution that provides a better client relationship management and improves clients service efficiency. We need to build a sustainable platform which supports massive development and meets the demands of the future. Digitalisation finding an end-to-end digital solution for clients to be able to access their banking information as well as professional advisory services anywhere and at any given time. Global Market Positioning finding a trust-worthy and reliable solution that will be accessible by our clients globally.

13 Client s Perspective CORE MARKETS o Luxembourg HQ o United Kingdom o Switzerland o Singapore STRATEGIC MARKETS o France o Germany o Spain o Austria o China o Hong Kong o Thailand o Malaysia o Nordics

14 Operational Perspective Simplification operational efficiency gains by reducing the number of systems across the infrastructure, & by integrating functionality across back-office, frontoffice We need to build a sustainable platform which supports massive development and meets the demands of the future. Digitalisation taking advantage of technological advancements to drive a higher level of automation across the organisation IT-related Structural Cost Reduction reducing the cost of upgrades and maintenance

15 Operational Perspective At the time To be kept To be removed To be replaced Now New

16 Operational Perspective Old Core Banking System Processes Affected WealthSuite Front Office Upgrade e-banking + CRM Client Reporting AML Tool Reconciliation Tool Interfaces DEVON Infrastructure MIS/COGNOS

17 Rationale Regulations and Risk Perspective Risk management providing the highest quality of service while minimising operational risk Reinforcing client trust and loyalty Mandatory regulations keeping up with all regulations in a timely and cost-efficient manner Financial services from a trustworthy institution

18 Temenos solution Michel Jongen Account Management Director, Temenos

19 Temenos Solutions DISTRIBUTION WealthSuite Channels Interaction Framework FRONT BACK WealthSuite Front Office WealthSuite Core Banking WealthSuite Financial Crime Other Integration Framework MGMT. WealthSuite Analytics & Reporting

20 Integrated Back and Front office Data Synchronisation Integrated Processes B2F and F2B Online interface, always synchronised Pre-defined integrated processes Core Banking services called by F-O processes Pre-Trade Compliance, Fees & Tax, Elective CoA Common Base Configuration Common (F/O and B/O) Model Bank Reducing time-&cost-to market Can be adapted to context Unified User Interface Core Banking screens embedded in FO platform Common User Agent Client connectivity Multi-channel mobile banking

21 WealthSuite - Functional Architecture Screening AML CHANNELS Branch RM IFA ATM Internet Mobile Open API Financial Intelligence MiFID II RISK & COMPLIANCE CRM Prospect Management Customer Output Campaigns Origination / onboarding Alerts FRONT OFFICE Advisory Services Portfolio Management Ordering Product Catalog Teller Treasury Dealing Profitability & analytics REPORTING & ANALYTICS FATCA & CRS IFRS Regulatory Reporting Data Accounts & Deposits Lending Limits and Collateral Overdues and Collections Cash Management Payments Trade Finance Forfaiting and Factoring CORE BANKING & PAYMENTS Market Data Management Trading and Settlement Corporate Actions Reconciliation Capital Markets Forex Money Market Fees & Tax Accounting & G/L Operational Intelligence Predictive analytics

22 Implementation process Hervé Maillot Deloitte Advisory & Consulting Director

23 1. Project Scope 2. Implementation Approach 3. Overall Timeframe 4. Key Success Factors

24 1. Project Scope Internet Mobile Tablet Financial Crime Analytics & Reporting Integration Framework Channels Interaction Framework Front Office Core Banking Integration Framework Third party systems Replacement of 24 legacy applications by 8 new applications 108 interfaces developed 86 core gaps on Core Banking

25 2. Implementation Approach TIM Temenos Implementation Method Highest value creation with lowest risk due to a proven combined methodology EVD Enterprise Enterprise Value Delivery Delivery BUSINESS TECHNOLOGY PROJECT MANAGEMENT Adopt instead of Adapt Model Bank based Started with the definition of a Target Operating Model Time-boxed Focus on Speed & Quality

26 3. Overall Timeframe Go Live Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Analysis Build TOM PLW Core and Local Gaps Specifications Satellites & Interfaces Specifications T24 build Satellites build Local customisation and development Core Banking (T24) delivery Ebanking delivery TAP delivery Insight delivery Dry run Dress Rehearsals Migration Migration Design Migration Build Dry-Runs and Rehearsals Testing Test Strat. and Prep. System Testing Integration Test UAT Change Mgt Induction training Ongoing Communication People on-boarding Procedures updates Organization Adaptation End-user training Post-Prod Support

27 4. Key Success Factors BUSINESS Change Management started early with regular communications Early involvement of Power users already during Integration testing Get earlier sign-off from business Train more power users APPROACH Smoke testing within the vendor premises Clear testing governance with proper definition of defects and enhancements priorities Spend more time in fitgap analysis and describing future processes PROJECT MANAGEMENT Full support from executive leadership Strong and agile governance Planning and budgeting tightly and centrally controlled Postpone start of MIS stream Key Success Factors Lessons learned

28 Business benefits Michel Jongen, Account Management Director, Temenos

29 A predictable, low-risk implementation approach State-of-the-Arts Technology Foundation for Digitalisation Improved Security Highlander Benefits Efficiency A Unified Platform for Wealth Partners Best Private Banking Platform in EU Integrated Platform

30 Changed the Finance Organisation Enabled consolidation of entities, granular reporting, Better data indexing, standard rules, standard processes We provide the right insights to front office to generate more business Able to react faster to requests from the business 30% Improvement of headcount efficiency in the back office reporting Streamlined processes for audit proof

31 Focus on banking Achieved full STP in internal processes 47% reduction in IT applications used Enabled Nordea digital brand Cost pressure removed Increased agility and became independent

32 Foundation for a client-centric bank Competitive edge Self-Service Aiming for 25% of back-office time shifting to client facing activities Understanding client profitability Fixed data discrepancies

33 Future plans Jean-Phillipe Bailly Chief Operating Officer, Nordea Bank

34 Next Step Further Improvements and Investigations Extending use of available capabilities Investigating all range of capabilities of our system to find new functionalities; going further beyond what was initially proposed in the scope Improvement and development of all on hold functionalities during the first phase to deliver within the scope Implementation of additional modules E-banking trading functions and providing more information to clients Mobile solutions Treasury functions MiFID II and Investment Advise proposal generator Online AML system; SWIFT filtering Investigating synergies with rest of Nordea Group domestic Private Banking and Wealth Management

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36 Thank you