Client: A tier 2 investment bank

The bank’s treasury operations department faced the challenge of reducing operational costs by the equivalent of five full-time equivalents (FTEs).

The organisation had already taken all the obvious steps to increase operational efficiency, including:

  • migrating the vast majority of operations to low-cost offshore locations
  • improving straight-through processing (STP) to 98% efficiency
  • reducing headcount by 10% in the previous year

Having made all of these changes, the bank was unable to ascertain where further efficiency improvements could be made

Our operations specialists studied the treasury operations department with the objective of recommending efficiency measures that would facilitate a headcount reduction of five FTEs or an equivalent cost-saving.

The scope of our evaluation included all treasury operational areas, including the middle office, which had a total headcount of 45.

In the course of our analysis, the specialist also examined the existing

  • operating model
  • process flows
  • user guides and control points

The project highlighted three key areas requiring further analysis, including confirmations, the middle office and payments.

By following the agile operational efficiency methodology, the bank’s required efficiency gains were achieved by

  • eliminating manual confirmation matching by improving in-bank procedures and automating affirmation processes
  • migrating middle office functions to low-cost nearshore locations (an analysis established that there was no need for trader proximity)
  • eliminating the overlaps in controls that were highlighted by the project, particularly in middle and back office functions