Offshoring Cash Securities Operations

We helped a European broker achieve a united, strategic plan to lower their costs.

Our client

A European broker/dealer interested in alternative sourcing models for UK based securities processing, but concerned about the risks.

Our challenge

Our client was looking to offshore the processing around its UK based securities operations, employing around 450 full-time staff.  Their primary motive was to achieve lower transaction and servicing costs. However they had little experience of outsourcing or offshoring and the senior management were concerned about both strategic and operating risks and about service quality.

We were engaged to assess the potential alternative sourcing models and to develop risk management based transition plans.

Our unique approach

  • We deployed a small team blending securities operations, operating model and change management expertise. Our team took this approach:
  • We designed and ran a management workshop to understand and align behind the key business and operational imperatives that would shape the assessment. These included strategic risk, operating cost, transition and operating risk, supplier service capability and quality.
  • We captured and assessed the current  operating model in terms of functions, processes, structure and skills/knowledge profiles.
  • We developed three operating model scenarios, each including the outsourcing of  reconciliations, confirms, clearing and settlement, fees and commissions, securities and cash management.
  • We designed a risk assessment framework covering macro factors such as strategic, reputation, compliance, contract, and concentration risk, as well as operational factors including transaction volumes and values, service expectations and knowledge/skill requirements.
  • We conducted a review of potential  near and far shore service providers, against the risk framework.
  • We developed a transition and change plan that addressed the offshoring of processing and functions and the realignment of retained onshore processes and people.
  • We designed and ran a final series of management workshops to educate, discuss and review options.

Our enduring effect

Our approach meant that our client’s Senior Management Team aligned behind a target solution and a transition plan, with significantly greater insight into the potential risks, and how these could be managed.  They were now united behind a strategic, well informed and practical understanding of how to achieve their goals.