Business Architecture and Innovation Experiences in Establishing Business Architecture in a Global Financial Institution

Transcription

1 Business Architecture and Innovation Experiences in Establishing Business Architecture in a Global Financial Institution October 30, 2012 Gillian Christie, Managing Director Andreas Kalkum, Vice President

2 Agenda Credit Suisse a global bank Challenges in banking The business architecture response Business Architecture & Innovation 2

3 Credit Suisse Group today key facts Global bank headquartered in Zurich, serving clients in private banking, investment banking and asset management. Registered shares of Credit Suisse Group AG (CSGN) are listed in Switzerland (SIX) and as American Depositary Shares (CS) in New York (NYSE). Total number of employees: 48,200. The Group s long-term ratings are: Moody s A2, Standard & Poor s A, Fitch Ratings A. Business Architecture & Innovation 3

4 Credit Suisse A Single Source for Services The Credit Suisse business model combines the strengths and expertise in Private Banking, Investment Banking, and Asset Management. This combination enables the bank to serve clients globally with integrated solutions tailored to their needs. Integrated Advice Personal relationship managers give our clients access to experts, products, and every service offered by our integrated bank all from a single source. Customized Banking Services We offer individualized solutions tailored to our clients' life situations and needs. Innovative and Comprehensive Solutions We work across divisional borders to serve our clients with innovative and holistic solutions. Global Reach Our global presence and our partnerships in more than 50 countries allow our clients to transact their financial business anywhere in the world. Business Architecture & Innovation 4

5 Agenda Credit Suisse a global bank Challenges in banking The business architecture response Business Architecture & Innovation 5

6 External Drivers The nature of the Investment Banking industry is changing; three primary external drivers impact strategy Challenge Implications for Investment Banks 1. Market Cost pressures Margin compression International growth Be more efficient 2. Regulatory & Internal MiFID Dodd-Frank Basel III Swiss Finish End of life platform Complexity Reduction Simplify the target state 3. Client Client behavior New Business Models Competitors Listen and respond to clients Business Architecture & Innovation 6

7 Volumes The maturity of the market a product is traded in shapes our approach to reducing business complexity Product Maturity Curve State Description Response Exotics CDS (index) CDS (single name) Energy Swaps Eq. Deriv. (OTC) IRS FX Cash FI Cash Eq. Flow Hybrid Bespoke Stock Exch. FX M.M. Bond IDB. SEF SEF SEF CCP CCP CCP IDB IDB C DB GS IDB IDB BNY CS JPM IDB IDB IDB Highly commoditized products Electronically traded through exchanges, market makers and inter-dealer brokers Products being pushed towards commoditization because regulation is forcing an exchange traded and centrally cleared processing model Illiquid/exotic contractbased products traded bilaterally requiring hightouch servicing Improve consistency and reduce the amount of touch points between our firm and clients Reduce business and technology complexity by creating standardized and automated processing Manage capital efficiently by building world-class risk management systems Increasing Business Complexity Increasing Technology Complexity Commoditization Note: SEF Swap Execution Facility CCP Central Clearing Party Business Architecture & Innovation 7

8 The complexity of the current infrastructure was driven by product aligned investments Legal Entities Ref. Data Ref. Data Attributes Rapid time-to-market for new products and functionality Capable of responding quickly to dynamic business priorities Product-aligned development (e.g. multiple risk systems) High complexity and TCO Multiple sources of the truth Line-of-business governance Limited Business / IT accountability for the platform TCO Business Architecture & Innovation 8

9 Flow Hybrid Bespoke The aspirational Target Operating Model (TOM) supports the strategies of business and technology Banks Hedge Funds Inst. Inves. Corporate s UHNW HNW Retail Attributes Client Sol. Trading Post Trade Finance Ref. Data Enterprise Content Portal Order Management Intelligent Order Routing Cross-product and Collateral Management Finance and Product Control Common Shared Reference Data A product maturity based three-pipe model enables us to quickly respond to a dynamic and diverse set of business priorities while minimizing the impact on the cost or complexity of the core Banking Dramatically reduce complexity due to reduced number of business rules Lowest RtB and TCO without forcing one solution for all Allows for a more rapid response to regulatory and market changes Enables cross-product reuse Allows for opportunistic revenue generating investments without adversely impacting the strategic core platform Single golden source for client, product and book data to reduce reconciliations Business Architecture & Innovation 9

10 Reference Data Data and and Market Data Data RTB Spend Investment Portfolio choices Outcomes of Different Investment Priorities BAU Model Current State Legal Entities 1 If we continue to manage our cost base and investment budget without a longterm vision, our maintenance costs will outpace our business growth Ref. Data Business Architecture Optim ized Model IB Entity Securities Neutral Client Facing Trade Execution Management Validation and Enrichment Collateral Management and and Margining Clearing Settlement Finance Only investing strategically towards reducing technology complexity would be very costly and could stifle business growth opportunities App. Rationalization Optim ized Model Globalizing from 1800 current applications to strategic Client Sol. Trading Post Trade Finance Ref. Data Aspirational Target Operating Model Banks Hedge Funds Flow Inst. Corpor UHN Inves. ates W Investment Bank Enterprise Content Portal Order Management Intelligent Order Routing Hybrid Bespoke Finance and Product Control Common Shared Reference Data HNW Retail Banking Cross-product and Collateral Management Using the Aspirational TOM as a tool to align investment prioritization reducing business and technology complexity will enable successful business delivery and a lower RtB Benefit Realization Business Architecture & Innovation 10

11 Reference Data Data and and Market Data Data RTB Spend Investment Portfolio choices Outcomes of Different Investment Priorities Current State Legal Entities Ref. Data BAU Model If we continue to manage our cost base and investment budget without a longterm vision, our maintenance costs will outpace our business growth Business Architecture Optim ized Model IB Entity Securities Neutral Client Facing Trade Execution Management Validation and Enrichment Collateral Management and and Margining Clearing Settlement Finance 2 Only investing strategically towards reducing technology complexity would be very costly and could stifle business growth opportunities App. Rationalization Optim ized Model Globalizing from 1800 current applications to strategic Client Sol. Trading Post Trade Finance Ref. Data Aspirational Target Operating Model Banks Hedge Funds Flow Inst. Corpor UHN Inves. ates W Investment Bank Enterprise Content Portal Order Management Intelligent Order Routing Hybrid Bespoke Finance and Product Control Common Shared Reference Data HNW Retail Banking Cross-product and Collateral Management Using the Aspirational TOM as a tool to align investment prioritization reducing business and technology complexity will enable successful business delivery and a lower RtB Benefit Realization Business Architecture & Innovation 11

12 Reference Data Data and and Market Data Data RTB Spend Investment Portfolio choices Outcomes of Different Investment Priorities Current State Legal Entities Ref. Data BAU Model If we continue to manage our cost base and investment budget without a longterm vision, our maintenance costs will outpace our business growth 3 Business Architecture Optim ized Model IB Entity Securities Neutral Client Facing Trade Execution Management Validation and Enrichment Collateral Management and and Margining Clearing Settlement Finance Only investing strategically towards reducing technology complexity would be very costly and could stifle business growth opportunities App. Rationalization Optim ized Model Globalizing from 1800 current applications to strategic Client Sol. Trading Post Trade Finance Ref. Data Aspirational Target Operating Model Banks Hedge Funds Flow Inst. Corpor UHN Inves. ates W Investment Bank Enterprise Content Portal Order Management Intelligent Order Routing Hybrid Bespoke Finance and Product Control Common Shared Reference Data HNW Retail Banking Cross-product and Collateral Management Using the Aspirational TOM as a tool to align investment prioritization reducing business and technology complexity will enable successful business delivery and a lower RtB Benefit Realization Business Architecture & Innovation 12

13 Reference Data Data and and Market Data Data RTB Spend Investment Portfolio choices Outcomes of Different Investment Priorities Current State Legal Entities Ref. Data BAU Model If we continue to manage our cost base and investment budget without a longterm vision, our maintenance costs will outpace our business growth 4 Business Architecture Optim ized Model IB Entity Securities Neutral Client Facing Trade Execution Management Validation and Enrichment Collateral Management and and Margining Clearing Settlement Finance Only investing strategically towards reducing technology complexity would be very costly and could stifle business growth opportunities App. Rationalization Optim ized Model Globalizing from 1800 current applications to strategic Client Sol. Trading Post Trade Finance Ref. Data Aspirational Target Operating Model Banks Hedge Funds Flow Inst. Corpor UHN Inves. ates W Investment Bank Enterprise Content Portal Order Management Intelligent Order Routing Hybrid Bespoke Finance and Product Control Common Shared Reference Data HNW Retail Banking Cross-product and Collateral Management Using the Aspirational TOM as a tool to align investment prioritization reducing business and technology complexity will enable successful business delivery and a lower RtB Benefit Realization Business Architecture & Innovation 13

14 The aspirational TOM enables a long term strategy for investment prioritization through transitional states Current Logical Architecture Model Legal Entities Ref. Data Transitional State. Transitional State.? Aspirational Target Operating Model Client Trading As long as we build toward the aspirational TOM, we have still invested intelligently with outcomes with interim business benefits Transitional State Post Trade Finance Ref. Data Flow Hybrid Bespoke Banking Business Architecture & Innovation 14

15 Agenda Credit Suisse a global bank Challenges in banking The business architecture response Business Architecture & Innovation 15

16 Our response: Enable Business Architects across the Bank to drive transformation towards the target state Managing the Innovation Cycle Value Proposition Business Architecture And Innovation Transforming the Bank Telling the Story Establishing a common language Business Architecture & Innovation 16

17 We run a jointly sponsored IT/Business design governance committee Transforming the Bank Ratify and escalate DAWG decisions on IB FTB design IB Design Authority Issues escalated to DAWG and IB DA n nn Issues escalated 1 : DAWG > IB DA Issues escalated in 2012: DAs > DAWG Issues mandated Trade Capture Architecture Back Office Data Sourcing Structured Notes Reference Data Global Book Master Collateral End to End Decisions on design issues Design Authority Working Group nnn DAs open / closed/defer design issues Program level design coordination and escalation to DAWG (SRP) DA Reference Data DA Dodd Frank DA Prime Financing DA Basel III DA CRO DA Finance (CFO) DA Ops DA Decisions IB DA Escalation One of the recommendations - will be raised to the Design Authority for action and resolution Closed Design Issues: Following four design issues were closed since the last DA update: [ ] [ ] [ ] [ ] Program DAs Functional DAs Business Architecture & Innovation 17

18 We provide standard frameworks our Business Capability Model is used to drive transformation Establishing a common language via Models & Tools Benefits of BCM Provides a consistent framework and common language across the bank Business Capability Model (BCM) Benefits of BCM Helps analyze how budgets are aligned with underlying capabilities Helps clarifying responsibilities and accountabilities on a functional level Helps define the scope for new initiatives and align initiatives Helps define the Target Operating Model (TOM) and align IT architecture Understand functional redundancy in the application portfolio Provides a platform for mapping resources to business capabilities Business Architecture & Innovation 18

19 We train the firm s Business Architects Telling the Story Business Architecture & Innovation 19

20 We aggregate innovation and encourage new ideas Managing the Innovation Cycle Connect the Dots Crowd Source Ideas Innovation Aggregators Innovation Exchange Champion Solutions Business Architecture & Innovation 20

21 A global team for global challenges Front Office IT Head of Strategy & Architecture Shared Services COO Head of Business Architecture and Innovation Gillian Christie Innovation Team UK Business Architecture Team US Business Architecture Team Zurich Business Architecture Team Facilitates a systematic end-to-end innovation process to support innovative ideas from generation to implementation and value realization Manages IB relationship Manages AM relationship Andreas Kalkum Manages PB & BO relationship Lead for Tools, Training and Techniques Business Architecture & Innovation 21

22 Summary Business Architecture will help Credit Suisse achieving our vision Our vision is to become the world s most admired bank, renowned for our expertise in private banking, investment banking and asset management, and most valued for our advice, innovation and execution. Business Architecture & Innovation 22

23 Q & A Some think everything has been said. We think you might have some questions.

24 Business Architecture & Innovation 24