Sustainable model for the future

Business Process Outsourcing

To develop a sustainable model for the future, wealth management institutions have to rethink the way they operate – Business Process Outsourcing is one of the choices to make for a sustainable business.

Executive summary

The wealth management industry is currently facing a set of fundamental changes and challenges. Today, wealth management institutions across geographies have to cope with increasing tax transparency impacting the Return On Assets (ROA); the acceleration of regulatory pressure (FATCA, EMIR, MiFID II, etc.); new markets and client types requiring new competencies, services and channels; new technologies and legacy technologies (e.g. complex application landscapes and obsolete systems that will need to be replaced).

These developments are putting considerable pressure on wealth management institutions, and demand important strategic decisions. Existing players will have to accept these changes, adapt to them and develop a consistent approach for the future to create a sustainable model in order to remain competitive. Several levers can be used by wealth management institutions to review and adapt their business and operating models, which are closely interlinked.

Business Process Outsourcing—outsourcing of operations and IT—is one of the key strategic levers many wealth management institutions are currently considering or have already used to fundamentally transform their operating models. Business Process Outsourcing (BPO) is about strategic impact not only cost reduction—it allows wealth management institutions to concentrate on their core business and to significantly increase efficiency by sharing operational and IT costs.

In this article we will look at the wealth management institutions in Luxembourg that should consider Business Process Outsourcing as a solution and discuss the various options they have, describe the current supply situation and sketch the market outlook. We will then suggest some principles for executives to consider when discussing
Business Process Outsourcing. 

Inside magazine issue 5, June 2014

Inside is Deloitte’s quarterly magazine offering an exclusive insight into best practices, trends and opportunities faced by our clients across all industries.

Inside focuses on the main hot topics relevant for the market (Asset management, Banking, Insurance, Public sector, Healthcare, Private equity, Real estate, TMT, Manufacturing and consumer business, Transport and logistics). 

Inside magazine issue 5
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