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Reducing Third-Party Risks by 70% for a European Financial Services Company – SpendEdge’s Latest Supplier Risk Management Engagement

European Financial Services Industry Overview

With the increasing cost of compliance, companies in the financial services industry have started partnering with vendors to streamline and enhance efficiencies. This has helped companies to innovate and boost efficiency but at the same time increased risk-related incidents manifold. Our experience with clients shows that risk strategies in the financial services industry remain inadequate. Around 90% of companies have suffered third party incidents and they feel the need for effective risk mitigation strategies.

Business Challenges Faced 

The client, one of Europe’s fastest-growing companies in the financial services industry performed random and unscheduled process audits to ensure that industry, corporate and legal responsibilities are consistently being met. A random audit of procurement contract processes revealed the areas of improvement. The audit determined that the organization lacked a system to reduce risk and three lines of defense (3LD) goals. There was no segmentation of vendors across the entire supply chain and the teams lacked the visibility to identify potential problems. Operational silos and the lack of a central repository to capture and coordinate vendor contracts were further increasing the chances of compliance variations.

Inability to identify third-party risks can lead to operational disruptions for companies in the financial services industry. Request a free proposal to access our tailor-made supplier risk management solutions.

Our Research Approach 

Recognizing the business needs of the organization, the financial services industry experts offered an innovative supplier management solution to resolve 3LD challenges. They developed a strategy to scale the risk management process that included the supplier end of the workflow. Our experts identified companies that could automate risk assessment capabilities through a unified data set and advanced risk modeling.

With a 360-degree view of risk across all supplier relationships, the client was able to engage with suppliers more effectively and maximize protection for the audit group. Moreover, the insights into the financial services industry enabled the client to nurture long-term relationships with strategic suppliers and build detailed knowledge about how they operate. A centralized system for supplier data that all stakeholders can easily tap into was created with a single repository to encode risk best practices into a specific line of business workflows. 

Want to know how our customized financial services industry analysis helped the client to identify potential suppliers and minimize the chances of compliance violations?

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Engagement Outcome

The comprehensive insights into the financial services industry and the risks associated with suppliers helped the client to gain suppliers’ information with visibility to all and reduce fatigue from repeated assessment requests. The solution offered also helped the client to trace audit trails, improve accuracy, and reduce third party risks by 70% in the past 6-months.

Gaining accurate market insights and engaging with potential suppliers is crucial for companies in the financial services industry to trace audit trails and reduce supplier risks. Request a free demo to access our web-based procurement platform and gain reports across 100+ categories. 

Ways to Mitigate Supplier Risks in the Financial Services Industry

  • Develop a strategy that could improve the risk management process while aligning people and technology.
  • Enhance collaboration with suppliers and provide suppliers a place to update their information with visibility to all.
  • Monitor large third-party data ecosystems and gain real-time intelligence. 

To know in detail about the ways to mitigate supplier risks and improve procurement in the financial services industry, request more information from our experts.  

IR13

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.request free proposal

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

IR- category management


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.

To know more about our category management solutions

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Laptop with pen and spiral notebook on desk.

3 Easy Steps for Financial Institutions to Reduce Procurement Spend

Currently financial institutions are more inclined to rely heavily on outside entities even for overseeing core activities such as engaging with customers through contact centers. Although the current growth rate of financial institutions looks promising, several uncertainties can pose as threats. In this scenario, players in the financial space need to analyze ways in which they can minimize risk and simultaneously maximize their revenues.

For several years financial institutions primarily viewed procurement as a source of savings. The outbreak of the outsourcing revolution further amplified savings opportunities as these companies shifted more work to third-party specialists. However, these moves raised new operational and strategic dangers, which called for the implementation of robust management for financial institutions. As a result, the procurement functions of several financial institutions focus on balancing the twin priorities of value and risk. Here, we unravel three critical steps that financial institutions should consider for streamlining its procurement process and reduce costs:SE_Demo2

 Step 1: Classify spend data

It is imperative for banks and other financial institutions to maintain an accurate, clean and unduplicated source of data before proceeding with analyzing the spend. As far as data management is concerned, companies face numerous challenges. Some of these challenges typically include lack of standardized data, too much data, and substandard quality of data. Having a clear record of data helps financial institutions to classify data accurately and get a better picture of their average spend.

 Step 2: Collect and analyze data

Several financial institutions still rely on manual processes or basic excel sheets to tackle their data despite understanding the value of spend analysis. What these companies need is a classified structure to group and manage their spend data. An ideal spend analysis solution would automate the process of collating geographically disperse data and assigning them in a uniform scheme across the organization. The data classification should be combined with analytics tools that not only read the data but also gives a full picture to the financial institutions regarding their spend. It should also provide companies with suggestions on areas where savings opportunities can be utilized to their advantage. If done in a desired manner, spend analysis offers organizations with item-level visibility that would assist them to create a spend portfolio. The primary function of a spend portfolio is to identify the amount of money spent, in what category and with which suppliers; identify savings opportunities and devise future procurement strategies.

 Step 3: Execute on the identified opportunities

Once financial institutions have analyzed their spend data and determined the categories to target for cost savings, they have to prioritize those opportunities and conduct procurement initiatives for each. It is highly recommended that financial companies start sorting their procurement issues with a category where achieving success is easier and has minimum risk. After the procurement department in financial institutions gets through the easy categories and identifies areas for savings, they can expand their efforts and look for new opportunities to employ procurement strategies to save money.

To know more about how financial institutions can streamline their procurement operations and reduce costsGet More Info


IR16

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.banner SE (2)

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.

Financial Services Industry Overview

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ir10

Supply Market Intelligence Helps a Leading Consumer Financial Services Client Achieve an Annual Savings of $40 Million

The Organization for Economic Co-operation and Development (OECD) suggests that financial services typically comprise 20%-30% of the total service market’s revenue across the globe.

Despite the existing regulations in the banking sector, the global financial industry is optimizing their service offerings to pursue new challenges for sustainable growth. With rapid innovations and disruptions, companies in the financial services space are planning to increase their competitiveness and offer an array of financial instruments and products to the customers to manage risks and meet their financial needs. Due to the ongoing financial crisis, the financial services space is shifting to a more customer-centric environment to offer reliable and affordable services to the customers. Although the financial services industry is witnessing a promising growth, certain factors may influence the growth of the industry. These include:

Digitization: With the advances in the technology, customers have become more informed and are looking for agility and convenience in their banking possibilities. With the relentless growth in competition, leading banks are facing pressures to stay relevant and updated with innovations such as mobile services. Moreover, some banks are teaming up with digital firms to drive revenue growth and enhance the risk assessment process.

Regulations: In the recent years, there have been fluctuations in the regulatory environment with the entry of nonbanks into financial services. The banks are uncertain about meeting the regulatory compliance in terms of redesigning products and incentive policies and accordingly forecasting their business plans. Moreover, banking organizations are focusing entirely on driving efficiency of their risk and compliance programs to meet the applicable laws and supervisory expectations.

To counter these challenges and offer reliable solutions, leading organizations are insisting on the need for supply market intelligence solutions.

The Business Challenge and Journey

A leading financial services provider was looking for effective ways to operate more cost-effectively and boost their savings. Moreover, their procurement team wanted to improve supplier performance, mitigate supply risks, and drive innovation. The client also wanted to seek ways to meet government, market, as well as management expectations and further boost their return on equity. The primary concern for the client was to embrace technology to achieve savings targets and enhance their return on investment.

To assess the spending patterns and keep track of the essential data, the supply market intelligence specialists at SpendEdge tailored an extensive research methodology. The methodology in the approach comprised of primary and secondary research coupled with qualitative and quantitative research techniques.

The supply market intelligence solution offered by SpendEdge helped the client maximize the value from spend and gain detailed insights into the pricing and the procurement strategies specific to the financial services space. Moreover, the engagement also helped the client gain deep-dive insights into the recent trends and growth drivers and accordingly allocate their resources to meet the business requirements.

Fundamental questions answered in this supply market intelligence engagement include:

SP- supply market intelligence

The Results

The supply market intelligence engagement offered by SpendEdge assisted the client to gain better visibility into the procurement process. The client was able to profile and shortlist the key risks in the financial services space and apply the procurement best practices to remove the bottlenecks and improve service efficiency.


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IR32

Procurement Best Practices Study Helps a Leading Consumer Financial Services Client Deliver Personalized Experience While Controlling Costs

Category Overview

Typically, the consumer financial services industry consists of companies involved in personal loan services, such as credit card services, mortgage brokers and lenders, and consumer leasing providers, such as for personal, education, and automobile loan services. However, the consumer financial services industry excludes lease financing of commercial equipment, consumer brokerage, and investment services. In recent years, the consumer financial services industry has undergone a dramatic change as customers have become more sophisticated and demand high-quality, personalized experiences that match their lifestyles. As a result, firms operating in the consumer financial services space face the need to identify the upcoming consumer-driven technology solutions while establishing robust risk management plans, controlling costs, and driving profitability.

Let’s look at some of the fundamental factors that will influence the growth prospects of the consumer financial services industry in the coming years.

  • Deliver an experience: Lately, the dynamics between banks and customers has been changing. Customers don’t want their banking relationship to be purely about transactions; they want advice-driven banking solutions that are personalized to their needs and wants.
  • Distribution of services: With recent changes in the role of brick-and-mortar outlets and the growing importance of digital platforms, consumers now expect seamless real-time social and mobile experiences and the service mix should be based on data to make the most of changing patterns in channel usage.

Such factors are forcing companies operating in the consumer financial services industry to leverage solutions like procurement best practices. Procurement best practices solutions help firms adopt best-in-class sourcing and procurement strategies across their businesses. These solutions also provide information about the best practices followed by the peer group companies in the industry space and ensures the delivery of high-quality products and services and personalized experience, while controlling costs and driving profitability.

The Procurement Pain Point and Insights Offered

The client, a renowned player in the consumer financial services industry space, was facing challenges ensuring the agile discovery of innovative potential partners along with advanced risk management, control capabilities, and governance throughout supply and service provider networks. request free proposalAdditionally, the client wanted to identify the peer companies operating across the consumer financial services industry space, their key suppliers, and evaluate their sourcing and procurement best practices and capabilities to cut down their maverick spends across the supply chain.

To cater to the specific business requirements of the consumer financial services client, SpendEdge tailored a comprehensive research methodology. The research approach comprised of primary and secondary research methodology coupled with qualitative and quantitative data collection procedures.

Through the course of this procurement best practices engagement, the consumer financial services client was able to obtain category, supplier, region and branch-level spend intelligence to guide capital allocation strategies. Additionally, the client was able to identify the high-performing, compliant and low-risk suppliers and service providers and controlled costs associated with regulatory compliance. Furthermore, the client achieved operational efficiency and strict spend compliance, while freeing procurement talent to support both product and service innovation.

Fundamental questions answered in this procurement best practices study include

Business Outcome

The consumer financial services client identified the functional drivers and commercial decisions that impacted the profitability and implement best-in-class sourcing and procurement strategies across the supply chain. This helped them reduce maverick spends across their business units.

Want to know more about our procurement best practices solutions for consumer financial services industry?

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IR19

Spend Analysis Helps a Financial Services Firm Manage an Annual Spend Of $650 Million

Category Overview

In today’s competitive business scenario, customers across the globe have easy access to all information at any given point of time at their fingertips and expect superior service from the financial services firms. However, owing to the heightened customer expectations, financial services firms have started adopting spend analysis engagements to reduce the constant pressures to cut down pricing and cater to the ever-increasing requirements of the customers. request free proposalSpend analysis solutions helps firms operating in the financial services space to identify cost-effective measures and aid them to meet the specific requirements of their customers seamlessly.

With over 13 years of proficiency in offering a wide array of spend analysis solutions, SpendEdge helps companies operating in the financial services space to measure and improve their business decisions across business units and consequently help them cut down maverick spends.

The Procurement Pain Point and Insights Offered

A leading client specializing in offering financial services with business units spread across the globe was facing predicaments in achieving a complete visibility into the procurement operations from strategic sourcing to buying. Additionally, the client wanted to enhance visibility throughout the procure-to-pay process procedures and improve their spend reporting capabilities for audit requirements.

To cater to the business requirements of the financial services client, the spend analysis experts at SpendEdge tailored a tailored a comprehensive research method. The method included primary and secondary research coupled with quantitative and qualitative data collection procedures.

During the course of this spend analysis engagement, the client specializing in offering financial services was able to establish a center-led strategy with distributed procurement for specific business units and functions and services across every location. Additionally, the client accomplished seamless integration with existing ERP and database systems.

Fundamental questions answered in this spend analysis study include

Business Outcome

The spend analysis solution helped the client improve visibility and streamline their end-to-end procurement process throughout the organization. Additionally, the client implemented center-led strategies with distributed procurement for specific business units and functions. This helped them manage an annual spend of $650 million and perform both direct and indirect buying and accounts payable operations through a single platform.

To know more about our spend analysis solutions for financial services firms

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