Category: Banking, Financial Services and Insurance Case studies
Regulating Indirect and Direct Spend for a Financial Services Provider
Engagement Overview
A leading financial services provider wanted to enhance business efficiency. To develop a cost model for the realistic apportionment of costs incurred for each product and sub-products that are part of the operation, the financial services provider approached SpendEdge to help them leverage cost benefit analysis based solutions. Through the course of this engagement, a detailed quantitative analysis of various cost factors within the supply chain network was carried out to identify the indirect and direct spend categories.
About the Client
A leading financial services provider employing over 3500 professionals across various economies. The company is based out of the United States.
Business Challenge
The financial services provider was facing challenges in identifying the most cost-effective blend of counter-measures to save themselves from any potential loss. Additionally, they wanted to enhance value for stakeholders by discovering, acquiring, developing, producing, and marketing financial services profitably.
How SpendEdge Helped the Client?
Step 1: Identified price drivers for each cost category
Identifying and understanding the drivers for each cost category helped the client increase focus on developing a robust cost benefit analysis model that would best suit their organizational needs.
Step 2: Filtered and grouped raw data into distinctive segments
This step involved the segmentation of raw spend data into different sub-categories, which acted as a starting point to identify different spend categories.
Key questions answered in this cost benefit analysis engagement include
Benefits of the Engagement
With the help of SpendEdge’s cost benefit analysis, the financial services provider understood the economic impact of inappropriate business decisions. Additionally, the client uncovered major opportunities for improving their sourcing strategies by controlling indirect and direct spends.
Why leverage cost benefit analysis?
It is essential for financial services providers to analyze cost and inventories in today’s competitive scenario. Moreover, as businesses grow, their sourcing needs become more complex, making it a necessity to analyze delivery times, maverick spends, and cost elements across the supply chain. Cost benefit analysis helps firms make the best use of the suppliers and their capabilities.
Our Findings
Today, every business decision is greatly influenced by cost benefit analysis. Such is the importance of cost benefit analysis in identifying business risks and analyzing spend categories. However, it is up to an individual firm to decide and incorporate this capability. Failing which, financial services providers may run the risk of wasting valuable time and money by captivating on the least profitable tasks.
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A Leading Financial Services Provider Leveraged Supply Chain Risk Analysis to Enhance Risk Identification Capabilities
Engagement Overview
A leading financial services provider wanted to proactively address risks in their supply chain. Additionally, they wanted to enhance production and delivery capabilities across their supply network. As a result, they approached SpendEdge to devise a comprehensive risk analysis strategy for their global supply chains.
The supply chain risk analysis enabled the client to integrate risk prioritization as a core strategy in their current risk management system. Additionally, a detailed quantitative supply chain risk analysis was carried out to identify, assess, and prioritize each risk factor based on their impact. This further helped the client redesign their risk management system to leverage and embrace proactive risk mitigation strategies.
About the Client
A multinational financial services company headquartered in California, with offices spread throughout the country. They are one of the world’s top banks in terms of market capitalization.
Business Challenge
The client was facing difficulties in enhancing their risk management capabilities.
How did SpendEdge Help the Client?
Step 1: Devised an exclusive risk mitigation procedure to reduce supply-side risks
The risk management strategies had to be redefined due to the dynamic nature of supply chain risks and their influence on supply chain efficiency, visibility, and operations.
Step 2: Enhanced risk identification capabilities
Reducing the rigidity caused by an obstinate supply chain and regulatory requirements, which required the incorporation of significant changes in risk analysis, identification, and management.
Key questions answered in this supply chain risk analysis
Benefits of the Engagement
Supply chain risk analysis helped the financial services provider diversify their sourcing strategies and minimize the risk of supply chain failure. They also help firms establish backup arrangements by qualifying additional suppliers.
SpendEdge’s supply chain risk analysis also the financial services provider account for changes in organizational operations and data governance to address market trends including globalization and regional demands. Moreover, the risk analysis solution offered firms with superior visibility of supply chain processes by establishing a unified relationship between all tiers of the supply chain
Why incorporate supply chain risk analysis?
With sophisticated technologies now being available easily at fingertips, risk analysis managers are now in a pole position to bring in a cultural revolution towards adopting and implementing risk analysis as an integral part of business operations. Furthermore, to deal with all the deficiencies of traditional supply chain management systems, companies are now recognizing the need to incorporate risk analysis to identify and evaluate supply-side risks.
Our Findings
Supply chain risk analysis is a process, which not only highlights the shortcomings in various segments of a supply network, but also between the supply chain and the end-users. Moreover, devising a precise risk management strategy is the next big step towards accomplishing organizational goals. Also, the importance of risk analysis will continue to increase with the risks becoming more complex and costlier.
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SpendEdge’s Spend Analysis Helps a Prominent Client in the Insurance Industry Reduce Maverick Spend and Improve Savings
Overview of the Insurance Industry
The insurance industry plays a pivotal role in the functioning of the economy, owing to the amount of premium it collects, the scale of investments, and the economic role it plays in covering potential risks. Amid tightening regulations and low investment yields, renowned companies in the insurance industry are planning to redefine their business models to achieve sustainable growth and enhance their profit margins. The firms operating in the insurance industry are further planning to tackle the mounting pressures by focusing on developing new products, sales channels, and coverage areas. The growth of the insurance industry can be attributed to factors such as rising standards of living and increasing insurance coverage needs.
Although the insurance industry is witnessing promising growth, several factors may hinder the growth of the industry. They include:
- Disruptive technology: With the relentless growth in innovations, new technologies are disrupting the traditional broker model. It is estimated that smaller companies are more vulnerable to technology disruption and responding to the emerging changes effectively. Moreover, insurance companies are facing the need to include foundational shifts in their operating models and underlying architecture to ensure flexibility and agility in their process.
- Aging workforce: The average retirement age of the employees has increased; therefore, it becomes a challenge for the companies a large group of employees retires at once. To keep pace with the growing demand, insurance companies should increase their investment in talent acquisition to ensure stability in leadership, production, and client servicing.
- Regulations: Prominent companies in the insurance industry are facing the need to operate in the fluctuating regulatory jurisdictions and comply with these changing rules. Consequently, organizations are facing the need to improve their capital requirement and transparency of their existing process while keeping in line with the compliance requirements.
While companies in the insurance industry are working towards the attainment of their goals, it becomes necessary for the insurance companies to keep track of their resources to stay relevant and updated with the technologies. To understand the growth prospects and stay on par with the changing consumer behavior, insurance companies need to keep track of their expenses through a robust spend analysis solution.
The Business Challenge and the Journey
A prominent insurance company wanted to counter the challenge of inefficient management and gain better visibility into the business spend. The insurance company also wanted to manage their organizational spend and identify critical saving opportunities. With the help of spend analysis, the insurance firm wanted to gain accurate, consistent, and detailed visibility and identify the savings opportunities to accelerate decision making. The primary concern of the insurance company was to identify the potential bottlenecks in terms of savings leak and purchasing overlaps.
To achieve sustainability in the solution offered, the procurement experts at SpendEdge carried out interviews and discussions with prominent stakeholders in the insurance industry. Furthermore, to identify insightful ways to analyze business behavior for the insurance company, the experts further compiled information from sources such as trade shows, company presentations, and industry forums in the insurance industry.
SpendEdge’s spend analysis solution helped the insurance company understand the current industry trends and find sourcing opportunities in the market. The insurance company was able to understand the current state of spend and devise a short-term and medium-term strategy to improve savings. In addition, the spend analysis solution also helped the insurance company improve the process efficiency and enhance their overall business performance.
Fundamental questions answered in this spend analysis for the insurance company include:
The Results
The spend analysis solution offered by SpendEdge assisted the insurance company to understand the latest industry trends and offer complete visibility into the spend. The spend analysis solution also offered insightful ways to the insurance company to access, organize, and analyze spend data and ensure that the contract practices are on par with the industry standards.
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Spend Analysis Helps a Leading Banking Sector Client Reduce Procurement Lead Times and Material Spend
Overview of the Banking Sector Industry
With the rising global economic uncertainty, banking sector players are starting to look beyond compliance to improve their financial performance while focusing on the business outcomes. The global banking sector is highly fragmented and comprises of retail, corporate, and investment banking, and asset and wealth management companies. The banking sector is currently dominated by Europe, which accounts for approximately 43% of the market share across the globe.
Although the banking sector is expected to showcase promising growth, several factors are expected to hinder the growth of this space. These factors include:
- Stringent government regulations: Leading companies within the banking sector are facing relentless pressures to enhance their service offerings across niche market segments due to the fluctuating rules from governments across the globe. Additionally, leading establishments in this space are looking for effective ways of managing risks and meeting the capital and the liquidity ratio requirements.
- Weak global economy: With the fluctuations in the global economy, the overall consumer spending is reducing, and consumers are looking to invest tactically and reduce their spending.
These factors are compelling firms in the banking sector to leverage the use of robust spend analysis solutions. Spend analysis solutions help companies quantify and improve their business decisions, which would subsequently help them cut down on maverick spends. These solutions also help firms meet the business needs and demands of their customers seamlessly while being cost-effective.
The Business Challenge and Journey
The client, a leading player in the banking sector with business operations spread across the globe, wanted to standardize systems, processes, data related to customers, employees, partners, products, and vendors as their data was spread across various systems with no proper spend visibility. Additionally, they wanted to devise a common shared-services platform to enhance their efficiencies and effectiveness of their business while reducing the overall costs.
SpendEdge’s spend analysis experts tailored a comprehensive research methodology to provide better visibility into the banking sector client’s procurement data. The research approach comprised of primary and secondary research coupled with qualitative and quantitative data collection methods.
During the course of this engagement, the banking sector client re-evaluated and enhanced their purchasing activities and aligned them with their business strategies. The client also reduced costs and strategically improved supplier relationship as they gained a better spend visibility across products, services, and suppliers.
Key questions answered in this spend analysis engagement
The Results
This spend analysis engagement assisted the client with easy and quick access to relevant data within the banking sector through various spend reports. Additionally, the client improved their overall procurement efficiency and reduced procurement lead-time by automating all of their procurement activities.
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Spend Analysis for a Prominent Financial Services Provider Helps Analyze their Marketing Spend
Overview of the Financial Services Industry
Amid the growing concerns about regulatory changes, banks and financial institutions are facing the need to realign their businesses processes to respond to the increasing demand for transparency. Leading business organizations are investing heavily in technological capabilities to remain abreast of the competition and bring the most value to the customers. The growth of the financial services industry can be marked by frequents shifts in technology and organizations are looking to create a resilient, accessible financial system to meet the growing demand among the consumers. Although the financial services space is witnessing a stipulated growth, owing to the presence of numerous competitors, several factors may influence the growth of the market. They include:
Digitization: In this technology-driven environment, prominent financial services providers are finding it difficult to stay relevant owing to the relentless competition. With advances in technology such as mobile services, customers are looking for convenience in their transaction capabilities. To counter these challenges, organizations are relying on advanced technology platforms such as big data and analytics to sharpen risk assessment and drive revenue growth.
Stringent government regulations: Post the financial crisis, financial services providers are facing challenges to control risk and maintain compliance while offering services at comparable lesser costs. To go on par with the rising customer expectations, leading organizations are facing the need to reduce short-term costs and manage capital and risk while meeting the compliance standards.
To counter these challenges and analyze their spend in a seamless manner, organizations are utilizing the need for a spend analysis solution. A reliable spend analysis solution provides better insights into the spend data and helps companies identify the potential opportunities. The spend analysis solution also helps businesses manage the organizational spend and help companies identify the critical saving opportunities in a seamless manner.
The Business Challenge and the Journey
The client, a renowned financial services provider, wanted to gain an accurate, consistent, timely, and detailed visibility into the spending patterns and find prominent ways to reduce maverick spend. With the help of a spend analysis solution, the client wanted to easily identify the savings opportunities to accelerate the decision-making process. The primary objective for the client was to identify the potential bottlenecks in terms of savings leak, prices vary, and purchasing overlaps and compare the spend of the company with that of the industry competitors.
To gain better visibility into the spending patterns, SpendEdge’s spend analysis experts carried out an extensive research methodology with procurement experts in the financial services space. To detect fraud and other-complaint activity, the experts also compiled information across a wide array of proprietary sources such as paid industry databases, industry forums, and company presentations in the financial industry.
The spend analysis solutions offered by SpendEdge helped the financial services client compare the spend profile and related measures to aggregate peer group data and drive more informed business decisions. The solution also helped the client organize all the spend data from company’s different systems and gain better visibility to prioritize sourcing opportunities. Moreover, the spend analysis solution also sought ways for the client to accurately correct errors in descriptions and transactions as well as categorize the spend based on the priorities.
Fundamental questions answered in this spend analysis solutions include:
The Results
During the course of the engagement, the spend analysis solution helped the client to monitor and update date to ensure adherence to the contract terms. Moreover, the solution also helped the client decrease procurement costs and improve efficiencies through advanced real-time data and analytics. Through the spend analysis solution, the financial services provider was able to compare results and monitor the change in the process.
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SpendEdge’s Category Management Study for a Consumer Financial Services Client Helps Categorize their Business Spend
Overview of the Consumer Financial Services Industry
With regulatory changes and emerging technologies, financial institutions are transforming the way they manage risks and improve business effectiveness. The global consumer financial services industry typically includes establishments involved in offering personal loan services, credit card services, mortgage lenders and brokers, and consumer leasing providers. Moreover, renowned organizations in the consumer financial services space are focusing on improving their operating models to provide better transparency into the services rendered. Despite the financial crisis, prominent consumer financial services providers are focusing on offering reliable and affordable financial services to meet the growing consumers’ demands. Although the consumer financial services space is witnessing promising growth, some of the factors influencing the growth of the space are:
Meeting the rising demand for customer services: Since the financial crisis, prominent consumer financial services organizations are facing public scrutiny to regain customer trust and re-establish economic strength. In this era of seamless internet banking, there is a huge gap between the institutions and customers. With the rising demand for reliable and affordable services, leading financial services providers are facing pressures to deliver agility in the services rendered.
Cost reduction and efficiency: The growing competition in the financial services space is compelling organizations to offer reliable solutions at reasonable prices. Also, the regulatory changes implemented by the authorities to bring the cost of the services to a considerable rate are further forcing businesses to act in accordance with the compliance requirements.
Leveraging technologies and innovations: The rising market consolidation and technological advances are forcing prominent consumer financial services providers to stay relevant and updated with the current technologies. Moreover, the growing concern to enhance the market share and profit through brand differentiation is compelling businesses to offer innovative products and services to the customers.
To address these challenges and meet the increasing preferences of the customer segments, prominent organizations are facing the need for a category management solution. Category management involves the process of applying procurement methodologies to ensure maximum savings.
The Business Challenge and Journey
The client, a prominent consumer financial services provider, wanted to conduct an in-depth market analysis and focus on specific areas of spends. The client wanted to create data transparency and ensure sustainability in the services being rendered. Moreover, the client wanted to seek ways to tap procurement cost-reduction opportunities by coordinating and centralizing procurement activities. With the help of our category management solution, the client wanted to categorize the services into logical groups to efficiently allocate resources. Moreover, the primary objective of the client was to understand the price trends and fluctuations for the services being rendered and identify savings to promote growth opportunities.
To retain focus on the most important business categories, SpendEdge’s category management experts carried out an extensive research. The comprehensive methodology comprised of interviews and discussions with prominent stakeholders in the consumer financial services space. Moreover, to gain adequate insights into the strategic sourcing, category management experts at SpendEdge also compiled information across a wide array of secondary sources such as paid industry databases, company presentations, and industry forums.
The category management solution offered by SpendEdge helped the consumer financial services provider gain adequate insights into the consumer buying patterns. The client was also able to focus entirely on the service category and categorize the services based on the market trends. Moreover, the client also sought ways to analyze the current market opportunities and enhance their marketing strategies to meet the business requirements.
Key questions answered in this category management engagement
The Results
During the course of this engagement, the consumer financial services provider was able to realign their marketing strategy to attract customers by offering a differentiated set of services. The client was able to streamline their procurement functions and design compelling assortments to price and promote the services in the market.
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SpendEdge’s Cost Model Analysis Helps a Renowned Insurance Provider Identify the Key Cost Elements
Overview of the Insurance Industry
The insurance industry plays a pivotal role in the sustenance of the global economy by covering personal and business risk. Amid the variations in the growth rate, the insurance industry witnessed a considerable growth in the insurance premiums by an increase of 3.8% in 2015. Markets in Asia, North America, and Western Europe has been some of the major contributors towards this growth. Also, insurers are taking effective measures to re-orientate their offerings to rebalance their product portfolios and enhance their business offerings. Although the insurance industry is witnessing a promising growth owing to the increasing rates and reducing regulatory hurdles, several factors may challenge the growth of this market in the coming years. These include:
Relative advances in technology: New technologies may disrupt the traditional model of insurance. With rapid changes in innovations, insurers are under pressure to revise their internal operations and business strategies to stay relevant inspite of the competitors.
High penetration of cyber risks: One of the biggest challenges for the insurers is to assess the impact of threats on the company. As cybersecurity breaches can remain undetected for a considerable time frame, it will further affect the customers and other stakeholders. The growing concerns on the concentrations of cyber risk and further, the ability to offer real protection to the clients will affect the growth of the industry over the years.
Aging workforce: The average age of the workforce has increased, and organizations are witnessing a large number of retirees within a stipulated time. To counter this, prominent organizations are facing immense pressure to invest in talent and further manage age concentrations to ensure stability and maintain balanced production.
To address these challenges and optimize their service offerings, leading organizations in the insurance industry are utilizing a cost model analysis engagement.
The Business Challenge and Journey
The client, a leading insurance company, wanted to draft a cost-model analysis model to identify the cost elements for the services rendered. The client also wanted to assess the impact of each cost driver on the overall cost of the services. Moreover, with the help of cost model analysis solution, the client wanted to point out the gaps that need to bridged to increase the uptake of costs. The primary concern for the client was to compare the costs of the services and efficiently utilize their resources to meet the needs of the target audiences. The cost model analysis should also focus on the comparison of models to improve the competitive position of businesses.
To help the client evaluate the potential costs and revenues, the cost model analysis experts at SpendEdge carried out an extensive research methodology comprising interviews and discussions with prominent stakeholders in the insurance industry. To gain a comprehensive edge on the costs, SpendEdge’s cost model analysis experts also compiled information across a wide array of secondary information including company presentations and industry forums in the insurance industry.
SpendEdge’s cost model analysis helped the company in the insurance industry effectively assess the impact of each cost driver on the overall cost. The client was able to collect data based on pricing through quantitative cost modeling and scenario-based cost modeling. The client was further able to recommend on the lowest cost mix and reduce insurance operation costs to the minimum.
Key questions answered in this spend analysis engagement include:
The Results
The cost model analysis offered by SpendEdge helped the client gain a comprehensive image of the cost developments in the insurance industry. The client was able to consistently reduce costs over time and enhance their operational efficiency. Moreover, the engagement also had a significant impact on the policy issuance, administration, and claims in the insurance industry.
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Enhancing Contract Visibility and Productivity with the Help of Supply Chain Analysis
The Business Challenge
The client, a leading financial services provider with business operations spread across the globe, wanted to streamline their procurement function to improve productivity, compliance, and inter-department supply-demand visibility as their existing procurement function was highly decentralized and required an innovative solution to make use of its full potential. Additionally, the client wanted to enumerate key supplier performance metrics and categorize high-performance suppliers to build better relationships.
Engagement Overview
To help the financial services industry client streamline their sourcing abilities and boost cross-functional visibility the supply chain analysis experts at SpendEdge tailored a comprehensive research methodology. This in-depth research approach included primary and secondary research coupled with qualitative and quantitative data collection procedures.
Through the course of the supply chain analysis engagement, the financial services client gained superior visibility of the supply chain and determined their supply chain capabilities. The client also gained enhanced visibility and control, particularly in supplier relationships; identified the value-add services they could offer to the right sub-contractors to strengthen their delivery capabilities.
Key Findings
With the help of thus supply chain analysis engagement, the financial services client was able to ensure quality and compliance across the entire supply chain. This helped them achieve better ROI and boost sales.