New Capco Report Outlines Strategy for Effective Convergence of Bank Operating Models

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Report Offers Framework for Wealth Management and Investment Bank Combinations

Capco, the global provider of consulting and managed services to the financial services industry, has published a new report identifying key strategies for private and investment bank combinations that wish to maximize the benefits of a proposed or completed merger. The report, “Operating Model Convergence,” provides a clear picture of the benefits of combined operations and recommendations for creating a shared road map to a successful integration.

According to the report, the benefits of financial institution mergers are well-proven in sectors such as retail banking. Numerous studies have identified the benefits of combining wealth management practices and investment banks, but dissimilarities in markets, products and infrastructure often have led to results that fail to meet expectations. This report reasserts the premise that combinations can be successful, offering a realistic assessment of both the challenges and rewards of this strategy.

Some key highlights of the report reveal that:

  •     The growth of online information and self-service tools is creating demand among high-net-worth individuals for a wider range of sophisticated investment products and instruments that are traditionally offered to institutional investors.
  •     As the line between savvy individuals and institutional investors fades, this opening represents an opportunity for investment banks to reach a new base of clients, allowing them to serve the needs of this new class of investor and position their institutions for future IPO opportunities.
  •     Combining operating models is still a challenge, but the prospects for success are growing due to a change. This is due in part to corporate perspectives that recognize the value a combination can offer. It is also being driven by the availability of new classes of software that span multiple bank operating models, overcoming what was once a key obstacle: technical integration.

According to the report, there are several recommended steps financial institutions can take to improve their efforts to create this combined model.

  •     Understand your firm’s opportunity with a top-down requirements- and business-architecture diagnostic.
  •     Establish the vision for the combined model — gaining consensus from executive leadership and business unit leaders.
  •     Identify the target functions to consolidate and define how they will be combined.
  •     Implement the plan in phases, continually communicating the value and targeting short-term gains to build momentum.

Capco’s report outlines the reasons many combinations fail, identifies the changes taking place that offer greater chances for success, and offers a strategy for overcoming obstacles to implementing an effective and profitable operating model that will successfully serve the needs of customers and the firm alike.

The report is available now at http://www.capco.com.

About Capco
Capco is a global business and technology consultancy dedicated solely to the financial services industry. Our professionals combine innovative thinking with our unrivaled firsthand industry knowledge to offer our clients consulting expertise, complex technology and package integration, and managed services to move their organizations forward. Through our collaborative and efficient approach, we help our clients successfully increase revenue, manage risk and regulatory change, reduce costs and enhance control. We specialize in banking; capital markets; wealth and investment management; finance, risk and compliance; and technology. We serve our clients from offices in leading financial centers across North America and Europe. To learn more, visit our website at http://www.capco.com.

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Lane Cooper

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