Engagement Summary
Banks with high volumes of capital markets transactions maintain a wide range of product-specific trade booking and life-cycle management systems. For example, equity trading divisions will typically have separate systems for their cash equities, equity derivatives and stock lending/borrowing activities. Similarly, fixed income, FX and commodity trading divisions will have their own asset class and instrument-specific systems. This results in an unwieldy and highly complex IT infrastructure that requires vast quantities of human and financial resources to maintain. It also creates significant dependency and reliance on vendors for any major system changes, upgrades and ongoing product support. In 2018, the capital markets technology division of a global US banking institution retained Monticello Consulting Group (MCG) to assist with a large-scale transformation program to address these challenges.
Monticello’s client embarked on a multi-year initiative to build a centralized platform to accommodate a wide range of capital markets asset classes and instruments. The ultimate goal was to migrate all of the bank’s financial instruments onto this single system, yielding significant cost savings through the elimination of vendor fees and a reduction in overhead costs. In addition, a single centralized data model will reduce the efforts to meet regulatory reporting requirements and fulfill the reporting needs of internal stakeholders. The centralized platform has the added benefit of adhering to the ISDA Common Domain Model for derivatives products, which facilitates automation of back-office and reconciliation processes by using a standard representation of derivatives trade life-cycle events.
The implementation of a universal transaction platform is an ambitious undertaking that requires close collaboration between multiple technology groups, front office users, operational groups, risk management and finance partners. MCG consultants support our client’s executive leadership team with key program management and application integration expertise.
Project Background
Maintaining a large number of front-end trade booking and life-cycle management systems is both costly and inefficient. Consolidating disparate systems into a single platform will enable our client to stay competitive and to reduce inflated capital markets transaction processing costs. This program was initiated as a result of a cost analysis exercise which identified that our client’s per-transaction costs were significantly above those of peer institutions. In response, the bank developed a compelling business case which demonstrated the direct savings and operational efficiencies that could be gained through system integration and consolidation. Given the scale and complexity of the program, the client requested expertise from MCG to support several key efforts.
Engagement Objectives
Program Management:
MCG revised and streamlined the program governance structure for the client’s technology organization. We implemented an automated project management and reporting framework based on the bank’s existing Program Management Office (PMO) infrastructure. In addition, MCG developed the materials and framework used to communicate to the governance groups and the technology initiative oversight teams.
Testing Governance:
MCG partnered with the client to manage the development and implementation of the testing and reconciliation framework required to validate pre-production releases vs. conditions in legacy environments. The team created a streamlined and coordinated release playbook to manage activities across a large group of stakeholders within the various lines of business. MCG consultants obtained stakeholder sign-offs, oversaw software releases and maintained a documentation archive to capture all relevant supporting artifacts.
Client Value
MCG is a specialized service provider with knowledge and expertise delivering large-scale transformation programs. Our deep understanding of the competitive forces reshaping business models in capital markets, lending, payments, and digital banking are proven enablers that support our clients to remain competitive and gain market share in new and existing businesses. By leveraging our core practice areas covering Agile transformation, program management, and integration governance for complex change, MCG positioned its client for success by delivering the initial build-out of its proprietary booking and life-cycle technology solution. Our innovative program management approach allowed client stakeholders to drastically reduce the time spent updating multiple project plans and coordinating status updates. Instead, the client focused its time on meeting the milestones required to achieve the program’s rigorous schedule.
