Capco Outlines ‘Industrialization Imperative’ for Global Financial Services
“If you want to make it in the years ahead, you have to stop ‘making it all’
today,” according to a new report from Capco. Instead, industrialize non-core
activity. Focus totally on product and service innovation. Maximize delivery
NEW YORK -- March 26, 2013
Capco, a global business and technology consultancy dedicated solely to the
financial services industry, today shared its vision of an industrialized path
to increased ROE, uptake of surplus banking capacity and return to sustainably
profitable banking business. Capco is part of FIS™ (NYSE:FIS), the world’s
largest global provider dedicated to banking and payments technologies.
Rob Heyvaert, CEO and Founder of Capco and Corporate Executive Vice President
of FIS says: “To return to the ROE levels of 15% historically required by
investors, banks must now seize the chance to address deep structural issues.
Growth opportunity and sustainable value creation demand fresh approaches.”
Stephen O’Sullivan, a Europe-based Partner with Capco, comments: “Banks can no
longer do it all, if you want to make it in the years ahead, you have to stop
‘making it all’ today. Look long and hard at existing services and processes.
Then identify areas that external expertise and technology can handle more
O’Sullivan adds: “Headcount reduction and tactical cost cutting are no longer
sufficient to achieve healthy cost/income ratios. Nor will they enable the
break-through innovation demanded to access the unbanked and emerging wealth –
crucial to achieve uptake of the sector’s current excess capacity. It is
estimated that one of the top eight global banks could be taken entirely out
of the equation yet leave enough capacity to meet existing customer demand.”
However, Capco believes that financial institutions enjoy significant
advantages, even as the threat of new mobile and social media entrants becomes
a reality. While financial services lag behind other major industry sectors
when it comes to streamlining processes and collaboration models with
partners, the industry does have invaluable experience dealing with data and
privacy protection, as well as the burden of ever-evolving regulation. Capco
considers that by re-addressing fundamental operating models, institutions can
develop more efficient platforms to compete with new entrants in tapping the
huge unbanked and wealth in emerging markets opportunities.
What can banks do now? Capco’s vision of an industrialized bank is one that
‘does the right things in the right way.’ Cost cutting will no longer be
tactical and reactive, but rational and productive. Costs, earnings, capital
and growth will be better aligned to create more sustainable business models.
Straight through processing will create a highly efficient environment, with
low or no-touch, day-to-day processing and predictable compliance.
Transformation will come from addressing the front office and change functions
not restricting change to the back office and infrastructure. The resulting
streamlined structures will deliver what a new generation of demanding
customers want from financial services: personalized and responsive
How urgent is the task? “It’s very urgent,” says Ido Gileadi, a North
America-based Partner with Capco. “Financial Services is now a very attractive
proposition for new competitors outside traditional industry boundaries. These
newcomers don’t have the baggage of legacy structures and technologies. They
are highly innovative. They come from areas such as retail, telecoms and
digital media. They won’t just adopt and evolve conventional banking models.
They have the innovative flexibility to reach the unbanked and the huge wealth
in emerging markets.”
Now, some 150 years after it first impacted manufacturing, the
industrialization imperative is here to stay. The opportunity for
transformation is real. Staying competitive will need new partners and
capabilities offering true breadth of financial technology assets along with
deep industry expertise.
Get the complete picture. Download the Capco Thought Leadership Paper: The
Capco is a global business and technology consultancy dedicated solely to the
financial services industry. Our professionals combine innovative thinking
with our unrivalled first-hand 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 provide our clients with
tools to enable them to increase revenue, better manage risk and regulatory
change, reduce costs and enhance control. We specialize in banking; capital
markets; wealth and investment management; insurance; finance, risk &
compliance; and technology. We serve our clients from offices in leading
financial centers across North America, Europe, Asia and Africa.
Additionally, as a part of FIS (NYSE:FIS) the world’s largest global provider
dedicated to banking and payments technologies, Capco is able to leverage FIS
best-of-breed, innovative solutions and services to support client delivery.
Access to the FIS complementary skill set, global talent pool, industry
leading-technology assets and strong balance sheet, positions Capco even more
strongly to tackle complex architecture and large scale transformation in
To learn more, visit our web site at capco.com and subscribe toCapco's
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Caroline Beer, +44(0)20 3100 3796
Loretta Mock, +1-646-395-6300
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