Case Studies

At Adsatis we, work hard to capture the wealth of experience that we have in our team in order to offer our clients insights on the important issues that global firms and their leaders face in today's challenging environment.

Case Studies give brief summaries of work delivered by Adsatis to illustrate the company’s experience and highlight a selection of the projects that we have successfully delivered.

Client Service Support

A large UK bank was experiencing increasing trade volumes and an expansion of its global sales force. This was putting stress on the sales support process. Management asked Adsatis to review this support function in the light of industry best practice and to identify an optimum model to facilitate the planned growth. Adsatis interviewed contacts working for a number of the client’s peers. Since we guaranteed that all information provided would be non-attributable, we were able to gather relevant market intelligence. Our report explained how peers organised their sales support functions, how large their teams were, where they were typically located and their responsibilities. Our report also explained how this had influenced the levels of STP that had been achieved by the client’s peer group

Business Strategy – Origination

A major European Investment Bank and significant issuer in the global debt markets wanted to optimise its funding strategy by identifying key investors and issuing the most attractive instruments. The company also wanted to improve its relationship with other investment banks and financial intermediaries. The bank’s issuance programme was significant (€15bn) and its AAA status was critical to its business. Accurate information on investor buying patterns and attitudes to the bank’s debt was a crucial component in the formulation of the strategy. Moreover, it was also important to identify how the issuer compared to its peers so the client could position itself more effectively. Our team carried out a series of structured interviews with the 50 largest actual and potential investors and with the primary dealers at other investment banks who brought the bank’s paper to market. Adsatis was able to use its knowledge of rate and credit products and excellent market contacts to extract maximum value from the interview process and ensure that the analysis was both accurate and relevant. Key issues were identified in the existing issuance programme and in the way the bank managed its investor relations. Our report commented on investor perceptions of the issuer, why they would or would not invest in the issuer’s debt, current and potential issuance channels and attitudes towards electronic trading. Our recommendations were presented to the bank’s Treasury Division.

Business Strategy – Market Entry for European Platform

A well established US ECN wanted to expand into the European bond markets and asked Adsatis for advice. We made use of our extensive contacts in the industry to conduct structured interviews with several dozen key market participants, i.e. dealers and brokers. For our analysis we drew on this market intelligence and our own collective direct experience of the bond markets and electronic trading. Our report provided a comprehensive market and competitor analysis and identified trends and dynamics. Our assessment of the business opportunity also considered the competitive environment, the impact of market segmentation and all potential revenue sources, as well as providing advice on market entry. The client subsequently successfully deployed in Europe and rapidly gained a significant market share.

Client Research and Analysis

Adsatis was asked by a Fund of Fund Manager to undertake a survey of 50 clients to generate a better understanding of their product preferences, market expectations and service requirements. This would be a key input to the development of the sales and marketing strategy for their business plan. Adsatis developed the questionnaire, advised on the target list (which comprised a range of financial institutions across a variety of geographical areas) gathered the information, and produced a report that included all interview information, and key themes and conclusions. Using a combination of in house expertise on market research and information gathering, and experienced industry knowledgeable practitioner consultants Adsatis was able to extract detailed and unbiased information. This enabled our client to assess trends in the industry, determine additional opportunities that were available to them and how best to exploit these. In particular Adsatis was able to identify the vehicles and structures their clients were using to access those products and their preferred investment requirement. The valuable feedback from this exercise will assist our client to further develop their relationship with their clients and increase their franchise in the Fund of Fund business.

New Fund Implementation

A leading investment management company needed project management and business analysis carried out for a new asset/liability matching funds. Adsatis provided the key consultant to drive this project forward carrying out the design of new systems and processes, specifying the modifications required to existing systems and supervising the launch of the fund. Adsatis coordinated the day-to-day activities of the fund accounting work stream, analysed business requirements, supported the IT requirement specification and user testing, using input from various sources. We also worked as the business experts to solve problems as they arose, effectively drawing conclusions and making recommendations to ensure successful delivery.

Business Strategy – Market Entry – Emerging Markets

A large French bank wanted to expand into a number of niche businesses in the UK by establishing a London branch but first needed to assess the most lucrative opportunities that the UK market could offer. Adsatis advised that the client’s domestic experience and profile led us to believe that they should concentrate on the markets for local government and social housing finance, PFI and financial services for HNWI British property investors in France. Adsatis was commissioned to produce a business case for each. Since there is little public domain information about these markets, we were asked to use our direct market experience and extensive range of market contacts to assess the potential profitability of each opportunity, and to propose market entry strategies. Our analysis highlighted those opportunities where the client could use its previous experience in European markets, its domestic strengths and competence, also its extensive balance sheet to establish a profitable market presence. This led to the expansion of the company’s London team to take advantage of these opportunities.

Business Strategy – Market Entry Sterling Bond Markets

A major international bank based in Asia Pacific was planning to set up a Sterling bond operation in the UK, a critical step for the bank’s wholesale business outside its home geographical base. Internal management had prepared a strategy paper on this initiative and senior management required an objective and critical assessment of these proposals and the underlying assumptions in the paper. The company turned to Adsatis for help. We validated the facts gathered by the bank and produced a summary of the current market structure. We also analysed the main barriers to entry into the primary markets and the enduring nature of relationships between dealers and the main users of the market. Our review also looked at the investor community and we analysed the dominant market players as well as an additional 30 smaller ones active in the market. The drivers for this participation were identified and explained. Our report considered the business environment for Sterling fixed income products, including the effects of the economic cycle, government borrowing, legislation, UK membership of the Euro. It provided a critical analysis of the business case put forward in the internal strategy paper and the assumptions made regarding costs and revenues. As a result of our recommendations the bank decided that it lacked the necessary pre-conditions to make a successful entry into the market and that the timing was poor. Subsequent events, slower market conditions and further consolidation on the buy side, vindicated both these recommendations and the client decision.

Market Research and Analysis: Retail bond market strategy

A UK Investment Bank wanted to expand into the European retail fixed income markets and needed to understand the drivers of retail business, the key locations and intermediaries, the key competitors and the main dealer distribution channels. Adsatis interviewed 50 contacts from over 40 organisations and sought information from official bodies, e.g. national central banks and official statistical organisations, and public domain material. This research was used to analyse the European bond markets in terms of their main trading and regulatory characteristics. The report explained the relative market position and the main strengths and weaknesses of the largest intermediaries in each market. The main distribution channels were explained in terms of the platforms used and the sales overhead. We were subsequently asked to present our findings to the Capital Markets Management Board. With a better understanding of the issues it then made the necessary strategic decisions to make a successful entry into these markets.

New Product Development

A Government Agency wanted to provide retail investors with a new product. It needed to understand all long-term risks involved with this new product variant that it could formulate effective hedging and transaction strategies. The agency turned to Adsatis for guidance. Our team of consultants interviewed all relevant client staff and spoke to numerous Adsatis associates and market contacts, including traders, risk managers and quants. Our report evaluated the proposed product in the context of the wholesale and retail markets for SRP. In order that the client could appreciate the potential implications of its strategy we profiled these opaque markets in terms of their size, the players, the products traded, market dynamics and regulatory trends. We advised the client about the design of the product, suggesting a number of enhancements that would make it more robust and acceptable to retail investors. We also proposed hedging and transaction strategies that would make it easier to offset their risk in the wholesale markets, also to accommodate volume growth in the future. Our report concentrated on counterparty and market risk, including liquidity, swaption, interest rate and inflation risk, but also addressed morbidity and other indirect and/or unquantifiable aspects such as operational, legal & regulatory and reputational risk.

Implementing a Balanced Scorecard

A leading European Investment Bank wanted to improve its distribution by extending its production credit-based sales evaluation scheme. This was in order to reward the qualitative factors that define good sales people, especially in terms of good corporate citizenship. Adsatis interviewed key sales and trading management staff in order fully to understand the client’s business, its plans, its compensation round, its transaction management processes and its corporate culture. For the scheme to work in practice it would have to be simple to understand, operate and interpret, whilst taking account of the client’s complex regional and product-based reporting structures. Our report suggested a number of straightforward measures that the bank could use to identify and reward good corporate citizenship and how it should use them within a balanced scorecard approach to performance measurement. We explained the different approaches taken by competitors and highlighted what would work for them. The client asked us to return nine months after launch to give feedback on the implementation and effectiveness of the new scheme. We highlighted a number of process inefficiencies that had inadvertently been introduced and once again helped to make the scheme more effective.

Sales Credit Review

Having participated in our Sales Credit Survey, a large US Investment Bank realised that its sales credit schedules were inconsistent between different products in a given location and between different locations for a given product. An Adsatis team looked at the client’s schedules in detail by product and region and used information from the survey to benchmark them against their peers. The client’s product classifications were inconsistent between different regions and differed from those of their competitors. Also, the client used uncommon turning points to define its tenor buckets. Both factors made the analysis complex and great care was needed to ensure like-for-like comparison. As a result of our report, the client knew that it was competitive with its peers and that its relative sales incentives between different products and regions were aligned with its business strategy.

Design of Cash Equity Production Credits System

A leading European Investment Bank had integrated its cash equity and fixed income divisions and in order to have a consistent way of valuing sales contribution across all asset classes, wanted to replace the traditional commission-based measures with cash equity production credits. The first step for the Adsatis team was to interview all key personnel so as to understand both their business and their sales evaluation procedures. Whilst only two other banks had previously attempted this exercise, Adsatis made use of its contacts and was able to advise the client on industry best practice and the common pitfalls. On the principle that sales contribution should measure attributed revenue net of external costs, we suggested an attribution model based on the client’s existing team coverage model. This overcame the industry-wide problem of disaggregating client level net commission and produced meaningful individual sales-level net revenue data. We were also able to recommend methodologies for more efficient cross-selling and tail management. Throughout this engagement, our consultants worked to build the necessary internal commitment to ensure the successful implementation of this new approach. We also set in train a full transfer of knowledge to the internal teams managing the implementation so that Adsatis’ involvement could be kept to a minimum.

The Adsatis Sales Credit Survey

Adsatis hosts the highly influential biannual Sales Credit Survey, which is used by the industry to benchmark sales credits against their peers and to drive compensation, resource allocation, client strategy and product development. Eighteen top Investment Banks participated in the latest survey, which covered all of the major flow and derivative products across all asset classes. Clients use our data to understand cross-asset sales credit convergence and therefore to shape their own global, cross-product strategies. It also helps them to understand the hot topics of the day, such as general product commoditisation and the increased penetration of electronic trading. Our individually tailored reports show what each client pays relative to its self-selected peer group and to the industry as a whole. They also provide valuable information about industry calculation methodologies and the use of modifiers, the use of balanced scorecards in the compensation round and the use of sales credits to further cross selling.

Bonds Business European Strategy

A US Bank had recently acquired and re-branded a bond trading operation in London (with an emphasis on odd lot trades) in order to develop a European business to complement its highly profitable US division. The client asked Adsatis to analyse the current operating model and business performance and to recommend a future business strategy. Adsatis interviewed key staff, spoke to a number of market contacts and analysed the bank’s business in terms of service definition, financial performance, trading style, product mix, sales approach and connectivity strategy. The odd lot business was analysed in the context of the retail, institutional and dealer markets and we explained fully the reasons for the lack of competitors in this niche area. Adsatis made a number of tactical and strategic recommendations to sharpen the bank’s business model and enhance its market position. These covered: dealer market focus; Asian business strategy; retail intermediary strategy, clarification and differentiation of the client management function; leverage of USD product to Europe and European product to the US; performance management and measurement; branding and PR; white labelling and reverse white labelling; product partnerships; development of an odd lot bond Exchange and an electronic repo platform.

Retail bond market strategy

The objective of this report was to provide an overview of the retail market for fixed income product investment in Europe for major European Bank. This was to include an analysis of the drivers of retail business, the key locations and intermediaries, the key competitors and the main dealer distribution channels. It was recognized that the dynamics of the retail bond market are much more complex than equity markets and may vary significantly from one geographic location to the next. The Report aimed to focus on three key areas:

  1. A geographic analysis of the marketplace identifying market characteristics, market size, and key intermediaries
  2. An analysis of the main competitors amongst the international dealers – their relative market position and key strengths and weaknesses
  3. Distribution channels – the use of technology and sales overhead

Information was obtained from a combination of official bodies (e.g. national central banks and official statistical organizations), existing relevant market research and from direct dialogue with market participants. More than 50 individuals from over 40 organisations were spoken to during the course of this project. The report itself was a very thorough analysis of the European retail markets, both onshore and offshore. Specific observations on the market were drawn and Adsatis consultants assessed the impact of the regulatory change on the retail market, which the bank found very interesting. As a follow-up to our analysis we were asked to make a presentation to the Capital Markets management Board. They felt that as a consequence they understood the European retail market for fixed income products and felt able to make the strategic decisions necessary to make a successful entry into the market. They have subsequently sought from Adsatis specific staffing advice.

Client Evaluation MIS

A major, global, investment bank had recruited a new senior management team which wanted to manage customer activities across the whole organisation. However, the bank had previously been organised heavily along product and geographical lines. Remuneration tended to follow the product and regional boundaries, and there were few incentives for salespeople to transact outside their existing boundaries. Consequently, salespeople operated with a narrow focus, frequently failing to maximise business opportunities in other products or develop more profitable cross-product business lines. Moreover, nearly all the bank’s systems were organised in the same way and there was a vacuum of good quality, comparable management information with which the new team could work. In addition to business management issues, there was a core problem relating the absence of a unified customer data structure, including unique identifiers for each account. Adsatis Ltd were recruited to analyse the bank’s problems and recommend a strategy to create a more streamlined and profitable sales organisation. Working, closely with the bank’s own staff from management, sales, trading and IT, Adsatis Ltd was able to recommend an effective solution. By implementing a new, unified sales management structure and developing a sales evaluation methodology that identified profit potential of each product area and can be used to evaluate customers, salespeople and product, Adsatis re-invented the way this bank conducted sales.In addition good quality data is an essential requirement of any system which manages sales across a wide range of customers and products. Adsatis designed a process for the maintenance of their database and trained permanent staff to manage this. This eliminated any duplication and enabled accurate reporting of all transaction data at sub-account, legal entity and group level for the first time in the bank’s history. The benefits of these developments continue to grow and for the first time, it has been able to have a unified, cross-product, global view of its activities, resulting in more focused and quicker decision making.

Basel III – Wrong Way Risk MethodologyRead

The client required a more formal framework to satisfy Basel III regulations on credit risk mitigation. The project formulated and implemented a cohesive Wrong Way Risk framework, which accurately identified and capitalised wrong way risk across all business areas. Using quantitative correlation, qualitative parameters, stress testing and Monte Carlo analysis techniques, Adsatis provided a comprehensive, transparent framework, which identified wrong way risk with regard to specific trade exposure, and correlated collateral and general wrong way risk for counterparties. Weaknesses were highlighted and addressed, thereby strengthening the whole risk management framework, resulting in an overall reduction in RWA. In addition, Adsatis designed and created the interim technical solution and liaised with internal IT to create the final strategic solution, providing process recommendations and the roadmap for implementation.

Exotic Products Risk Reporting

The risk figures produced by an exotic products desk of an UK investment Bank differed from the risk numbers produced by its internal market risk systems, which were used for internal and external risk reporting purposes. As weaknesses were identified in the systems employed by market risk management, it was decided to employ the risk figures produced by the desk for internal and external risk reporting. Therefore, the institution required external senior expertise to build a data feed between the desk’s risk system and the market risk management systems. Adsatis was able to offer the right combination of risk management and technology expertise, which was deemed central to the project’s success. Hence, allowing for width, in terms of IT systems experience, data processing and flows, as well as depth, with the knowledge of exotic products and corresponding risk management methodologies and techniques. Constructing the data feed was a challenge, due to the complex IT architecture and remedial processes employed by market risk management to produce the risk figures reported and the disparities with the data model employed by the desk. Therefore, it not only required the reconciliation of the differences identified, but performing the necessary checks and implementing the required data cleansing processes to ensure the integrity of the risk figures. Credit Risk Management

EUAs Decommissioning Project

A point had been raised during the client’s internal audit, due to the development of a large number of tactical databases and spreadsheet applications to measure counterparty credit risk and monitor product exposure. Adsatis was asked to analyse, plan and develop a strategy to replace the existing applications with more robust and compliant solutions, and to perform a high-level review of each application with business owner(s) to identify fitness for purpose, and requirements for enhancements. In addition, we developed criteria to allow cost-benefit analyses of existing EUAs, which would determine whether they were improved, or migrated to a replacement strategic IT platform. We defined the business case, wrote the specifications and managed the prioritisation and development teams. We provided a combination of risk management, business analysis and project management expertise to engage with users and meet project milestones. High-priority applications were decommissioned on time and to budget.

Single Risk Calculation Engine

A globalised UK bank needed to align the risk figures that the risk department & regulators were using with those maintained by the trading desk. Differences in the reference data and timeliness of calculation meant that the risk management department was reporting inconsistent and sometimes erroneous numbers to the regulator. Whilst the project was in flight, market volatility grew to unprecedented levels, driving up the department’s significant contribution to the banks daily VaR number and in turn raising government enforced capital requirements. The project had therefore to deliver rapidly to improve accuracy of the bank’s regulatory reporting to relieve pressure on the business at a very difficult time. An Adsatis team took over project management and business analysis on the project after it had become clear that internal resources were not sufficient. The team were able to rapidly identify that the project would deliver an unsuitable solution, which, most notably, would not meet the underlying business driver for starting the project, the need to align risk numbers between risk management and the trading desk. The Adsatis team revisited the design phase of the project which had not been completed effectively and re-focused the project whilst it was in flight. Through the provision of project management tools and techniques, Adsatis were able to bring together four teams of developers, two support teams , two testing teams, Front Office, Middle Office, Finance and Risk to work together consistently and effectively. To test all the new components and simulate the 15,000 number of computing actions that needed to take place every night, a complex 24/7 testing programme was designed and put in place to ensure optimisation of the test hardware that was available.

Pricing and Risk Management for OTC Derivatives

A major European bank was in the process of rolling out a global derivatives pricing and risk management platform. The bank had also recently become a member of a number of CCPs. Adsatis was engaged to define and develop the business case for the implementation of Financial Products Pricing and Risk Management for CSA and non-CSA Counterparties. The Adsatis team worked across functional areas to identify the main issues and impacts that the implementation of CSA/OIS discounting and non-CSA pricing would have on the ‘business as usual’ (BAU) transaction lifecycle, and to define the optimal solution. Areas investigated spanned pricing methodology, liquidity and collateral management, asset and liability Management, IT, Finance and Risk Management. The business case was delivered successfully and approved by all business stakeholders. Deliverables also included the implementation roadmap and financial projections with cost/benefit analysis, as well as recommendations on the creation of a centralised CVA/collateral management desk.

Improved Risk calculation

A global bank wanted to improve the efficiency and effectiveness of its risk calculation. It was taking an average of 2 hours of compute time per trade to calculate risk, yet some trades were taking many times this long. The bank wanted to improve the balance between precision of results and cost of calculation. By changing the way that trades were encoded and parameterised the bank would be able to improve the effectiveness of its risk calculations. Adsatis lead the project management of this work through design, build and testing. A test approach was designed to measure both the performance improvement as well as the valid functionality of the solution. Once performance had been validated the migration of trades to the new representation could begin. A phased approach was designed for the trade migration so that trades of a given type were tested as a group under the new representation before being migrated to the live environment. Business performance was improved as a result of the increased accuracy generated in the results, and processing costs were reduced.

Risk and P/L Explain

A UK Investment Bank had aggressively expanded its exotic equity derivatives business, but its risk management technology was becoming obsolete. Our consultant worked closely with the traders, quants and risk management teams to define and design a suite of tools for the front and middle offices to manage and monitor the desk’s risk. He produced business and functional specifications for IT to build a highly flexible and functionally rich application. His report gave a detailed explanation of the sensitivities, scenarios and reports required, as well as the market data manipulation and controls needed in the user interface. He identified a core set of scenarios that would be meaningful to all users, which consequently reduced the time taken to do their calculation runs. By engaging and faithfully representing all the potential users of the new application, our consultant was able to ensure that the final product had a high degree of user acceptance.

CVA Trading Platform

An international investment bank managed its exposures to counterparty credit risk in its OTC derivatives businesses by setting credit risk limits at counterparty level, pricing and hedging counterparty risk and allocating economic capital. The bank established a Credit Value Adjustment (“CVA”) management structure and required implementing a solution to improve the process for CVA for the front office businesses, that allowed it to price counterparty risk for all trades, based on marginal impact, and evaluate, monitor and trade the resulting counterparty risk for its portfolio in real time. The institution required external expertise to analyse and document the business requirements of its CVA desk and assess the solutions available, whether vendor or internal build implementations, and their suitability for integration into the bank’s legacy architecture. The combination of Adsatis consultants’ financial markets methodology and technology experience was considered critical to the success of the project. This allowed them to leverage the expertise and knowledge of the market landscape and draw on input obtained from industry contacts that have deployed similar applications and systems to assist the bank with its CVA implementation. An analysis of the business requirements for the CVA desk, including the CVA target operating model, its functional requirements and technology implications, was performed. This was then complemented with a detail assessment of external vendor solutions and internal build implementations from a selected number of Tier 1 and Tier 2 organisations. Recommendations on optimal solutions for the bank were provided, based on an agreed and consistent set of criteria, which covered aspects such as the systems architecture, design, features and requirements, the implementation ease and risks, the management and support requirements, and the resources, costs and implementation time-scales.

Strategy for Consolidating Client and Fund Data Globally

Adsatis provided consultancy services to define the strategy for consolidating client and fund data globally. The objective of the engagement was to facilitate the agreement of strategy, define ownership and governance of the project, generate high level business requirements. Additional deliverables included determination of the project plan (including resource estimates) and production of a work initiation document for the project.

Reference Data Consultancy

Adsatis was retained by the global markets division of a major European bank to establish organisation wide compliance with a newly defined “golden source” policy for reference data sourcing and distribution. The scope of the analysis covered product and client data across approximately 400 prioritised systems. The project output consisted of a current state analysis, the creation of a set of key performance indicators (KPIs) to enable management to assess compliance, and recommendations on a process to monitor compliance on an ongoing basis. The objective of the project was to establish a process for benchmarking the impact and benefits of a division wide investment programme in reference data management.

Product Requirements Specification

Adsatis was asked by a major financial markets data and service provider to develop a detailed business case for a new enterprise level data service. The objective was to develop a new product, leveraging the organisation’s existing data assets, but in an area not part of the organisation’s core products. Information was gathered through close collaboration with client personnel and using market contacts to assess market demand. Our consultants reviewed the range, coverage and quality of existing data assets and processes for data capture and maintenance. The team also conducted external market review across four major groups of potential customers and assessed the appetite for the proposed product against cost and other factors. To supplement gaps in the data, internal sourcing and outsourcing options were evaluated and short-listed. Models and conclusions were validated with the client and with select potential customer contacts all the while maintaining confidentiality of the commercially sensitive project. A detailed business case was delivered to the client comprising: a definition of the product in terms of data range, coverage and quality and specifying the interfaces required for customer delivery of the service; a commercial model; product roadmap and plans for the implementation; and a high-level sales and marketing outline. The business case was successfully used to secure launch funding for the product and to drive through acquisition of data for implementation.

Reference Data Strategy

Adsatis was asked by a large European Investment Bank to conduct a complete audit of its reference data. The objective was to improve process and control efficiency and to recommend how to meet users’ needs more completely. Our consultant mapped out the existing processes for reference data capture and maintenance. He then analysed the process flows and dependencies by system and assessed the extent to which business requirements were met. Information was obtained through a review of system documentation, as well as by interviewing key personnel. He conducted 20 interviews with system owners and data managers, and a further 10 with key business representatives. He used the information gathered to produce a set of data process flow diagrams and some clear recommendations, both tactical ‘quick wins’ and strategic solutions. This three month engagement was completed on time and to budget.

Reference Data Strategy

A leading European Investment Bank needed a detailed specification of requirements for all aspects if its current reference data management. Because of our expertise in this area the bank engaged Adsatis to help define a new global strategy. Two Adsatis data experts reviewed global usage of all key data types, including party (client and issuer), product, person and all related details, e.g. markets, calendars and mandates. Their report gave extremely detailed specifications for all aspects of reference data management, including data ownership, data models, operational maintenance processes and maintenance screens. Our analysis and specifications helped to mitigate the risk in the company’s data management process by providing a detailed definition of what had to be implemented. The client subsequently asked Adsatis to deploy a team of experts to manage the delivery of this significant global initiative.

Reference Data Usage Review and Technology Audit

A leading Investment Bank had a very large number of applications that used reference data, although actual patterns of usage were inadequately documented and therefore poorly understood. The bank needed an independent audit to help it to form a strategy to move to a new, scalable solution. It turned to Adsatis for its experience. An Adsatis consultant was engaged to analyse the consumption of instrument and client static data across the bank, from front to back and across all asset classes and businesses. For each application, he investigated and documented the data population, the attribute coverage and the delivery method from both strategic and supplementary data sources. His report gave the client a comprehensive understanding of how different applications within the bank were using reference data, and made a number of recommendations to improve the data population, the coverage and the delivery mechanisms. His advice was presented in terms of industry best practice for data management, based on our observations over years of involvement in this specialist area.

Technology StrategyRead

A major US Investment Bank had appointed a new Global Head of equity derivatives IT to deliver better value to the business. For a number of years, IT had been delivering tactical, local, desk-facing solutions and the bank’s trading systems had become inferior to those of its competitors. The approach had been justified by the apparent differences between the markets in EMEA, the US and Asia Pacific. However, the lack of a strategic vision had resulted in poor responsiveness to changing business needs. Adsatis was asked to identify the technological weaknesses constraining the business. We interviewed 50 key staff globally, mainly trading and sales, but including some in post-trade support and IT. Our report identified common problems worldwide and specific regional needs so that a strategic solution could be drawn up and implemented. Adsatis presented the findings to a newly formed Global Governance Committee and produced a straw-man to help it prioritise the necessary IT re-engineering. This helped the bank implement a strategy that would continue to deliver aggressively, but develop strategically so that scalability and future change could be fully accommodated.

Design and delivery of FI Analytics System

A leading UK Investment Bank had to replace its fixed income valuation and analytics system that had become technologically obsolete. The in-house knowledge that was used to produce this legacy system had been lost, so the bank asked Adsatis to help it to design and implement a replacement. Two Adsatis consultants were engaged to run an internal IT team to deliver the new system, from analysis to implementation. Key to the success of the project was ownership of both the problem and the solution. Our consultants successfully engaged staff from trading, sales, research, operations, control, IT and risk to coordinate their efforts to deliver a state of the art analytics platform. They obliged project sponsors and the governance committee to commit so as to ensure that all interests were represented. This was made possible by our consultants’ in depth understanding of their users’ needs. This ensured that users’ expectations were fully met and that the new system was embraced enthusiastically.

Decision Support for Energy Traders

A major European Investment Bank hired a team of Power and Gas traders but lacked the technology to support this new business. The IT team knew what was needed to enable the traders to book deals and manage their risk, and were working hard on these initial deliveries. However, the team was also aware that further phases of development would be more complex. Decision support tools to model the demand and supply side of these markets would take time to understand, specify and build. It could not afford to be distracted from the initial deliveries, but had to be up to speed with the subsequent phases of the project. The client therefore engaged Adsatis to document the requirements for these decision support tools. Some of these markets were evolving fast and no one had previous experience of modelling them, so Adsatis was asked to drive discussions with traders, quantitative analysts and risk management to come up with a solution. These tools were subsequently delivered and the desk now has a significant footprint in the market.

Pricing Tools

The investment division of a UK Fund Manager needed a project manager to implement a system running on DST HiPortfolio for pricing OEICs, Unit Trusts and Managed Pension Funds. Our project manager ran the team responsible for: gathering business requirements; analysis; developing unit pricing cost sheets; module testing and implementation; pre-implementation training; post-implementation support and documentation. By the end of the project some 100 portfolios were being successfully priced each day.

Pricing Methodology

A major bank wanted to adopt a more sophisticated approach to forward FX pricing by incorporating a higher level of interest rate derivative overlay. An Adsatis consultant was engaged to consider the implications of this strategy and to plan its implementation. Our consultant produced the business requirements, both for new pricing tools and for on-desk risk management applications. He also provided analysis and recommendations on how to mitigate any adverse effects on downstream trade processing flows and end-of-day P/L processes. He worked closely with the client’s in-house support groups to put together an implementation plan, making full use of existing bank resources and infrastructure. He set in train a full transfer of knowledge to allow them to support this more sophisticated pricing environment.

Pricing Methodology

A major Investment Bank needed to improve its pricing approach in order to increase the company’s presence in the STIR market. Adsatis reviewed the bank’s yield curve methodology in detail and compared it to market best practice. We identified interpolation, smoothing approaches and year-end turn pricing as those aspects of pricing that required enhancement. We then worked at a very detailed level with small teams of traders, quants and IT staff to define and then implement improved methodologies and new pricing techniques.

Traders Desktop

A large Investment Bank needed to update the technology to support a credit derivatives trading desk. In order to support increasing trade volumes, deal complexity and performance requirements, it needed strategic development based on detailed user requirements. The bank turned to Adsatis for help. Adsatis interviewed key staff in London and New York, from operations, finance and risk as well as the front office. We documented the business requirements for a new system to price credit derivatives, structured products and exotics and to produce consolidated cross product risk. Our report addressed: real-time pricing; electronic trading; deal capture and STP; new product/model integration; drill-down and aggregation; scalability and flexibility; near time intra-day risk; formal end of day risk, P/L and P/L Explain. It provided a global overview of requirements and addressed the needs of both the front office and all downstream users, including risk, finance and operations

Front Office Trade Workflow Automation

A major US Investment Bank knew that the growth of its derivatives business was increasingly hampered by inadequate workflow technology. Many of the business processes, especially those involved with quote and order management, booking and trade lifecycle event management were manual and inefficient. Adsatis was asked to review their global business process management and to recommend a strategic solution. Our interviews with key personnel in each region revealed that 80% of the problems were generic, even though there were separate IT projects underway to address them in the US, Asia Pacific and Europe. Adsatis chaired a series of regional working groups to challenge expectations, expose out-dated MO and to identify how technology could improve their efficiency. Our final report explained similarities and differences between their regional workflow problems, gave an assessment of the strengths and weaknesses of their current local technology solutions, explained how their competitors solved these problems and provided a straw-man to lead them towards a strategic global solution.

Trade and Lifecycle Workflow Management

A rapid expansion of equity derivatives business at a leading UK Investment Bank was in danger of introducing significant business risk unless key trade and lifecycle workflow processes could be automated. The client knew that no adequate off the shelf solutions existed so asked Adsatis to help solve the problem. Adsatis interviewed front office staff involved in all areas of the business, from vanilla flow to structured exotics, in order to obtain a complete understanding of their work. We also talked to middle and back office personnel to understand front to back trade and lifecycle process management at the bank. Our report identified the key areas of manual inefficiency and the causes of process bottlenecks, explained the drivers and dependencies and suggested a number of practical solutions. The client subsequently introduced selective operational automation that succeeded both in improving control and reducing risk. More importantly, the bank was able to free up valuable front office personnel time.

Business Strategy – Market Entry for FI Platform

The owners of a US fixed income ECN platform approached Adsatis for strategic advice ahead of the launch of their product in Europe. They knew that the American and European markets worked in different ways and needed their platform to be immediately embraced by European customers if they were to establish a European presence. Our team of consultants conducted extensive European market research and produced a detailed report with recommendations on market entry strategy. We consequently advised the client on the development and implementation of a marketing strategy for their electronic broking service. A senior consultant was then seconded to work alongside the head of European marketing to help establish the target European client base and to define a sales and marketing process.

Front Office IT Strategy

A leading European Investment Bank had bought a majority stake in a leading South African bank and wanted to build its investment banking capabilities. This local bank had evolved from the merger of a number of domestic retail banks and building societies and needed to be transformed, both organisationally and technologically, in order to raise its game to investment banking standards. A team of five Adsatis consultants was engaged to define a three year strategy that would use a best-of-breed mix of technology from the two banks to facilitate its growth. The team interviewed 100 key personnel from the front, middle and back offices, across all asset classes and all business processes. Adsatis then assessed the suitability of existing applications, identified the gaps in terms of future business requirements and presented its recommended additional or alternative technology solutions. Adsatis produced an extensive set of proposals designed to facilitate the anticipated growth in each trading area, also to ensure seamless process support from the middle and back office functions. Buy-in from key personnel was essential, so Adsatis ran a series of workshops to gain the necessary momentum for the successful implementation of the strategy. In addition, Adsatis put forward ideas for organisational change so that IT might operate to investment banking standards. We also identified the business processes that needed to be re-engineered for the new investment banking arm to be independent of the parent bank.

Analysis and Project Management for Transition Services Department

Adsatis provided consultancy to the Transition Services Department. Deliverables included the definition of business requirements for new, enhanced and merged applications, and translation of these requirements into technical specifications for IT developers. Responsibilities also included management of the progress of each individual IT project and monitoring of the overall programme of Transition Services IT development in Europe.

Interim Management Project as Head of Investment Accounts

Adsatis provided interim management role as Head of Investment Accounts for managing Life, General and Pensions funds and Unit trusts. The role was to initially stabilise the department, and then restructure the Investment Accounts Department to improve efficiencies, controls and workflow. This entailed a review of the department’s procedures and controls, and using ‘best practice’, restructuring and implementing the area’s activities from a product to a functional basis. This review led to a number of ‘Process Improvement’ objectives which once implemented led to cost savings through a reduction in staff numbers. Once this was completed the Adsatis interim manager successfully transitioned to a permanent employee manager who was made responsible for the day-to-day business as usual activities of the department

Analysis for Operations outsourcing project.

Adsatis provided resourcing of senior business analysts to a major back-office outsourcing project. The consultants supplied, both qualified accountants, fulfilled key roles in the planning, testing and migration of functions to the service provider, working closely with the project leads on both sides. The roles included responsibility for the conversion and parallel run workstream for the Life funds.

Middle Office Operational Risk Mitigation

The equity derivatives business at a leading UK Investment Bank was growing rapidly in volume and complexity, but the Product Control group was becoming unable to support them with existing systems. IT initiatives were underway to automate some processes, but the controllers were not sure whether the benefits would accrue in time to avert serious breakdown. Adsatis was asked to audit the business processes and analyse their dependence on technology. secure web browser . Our consultants assessed the additional hours that would be necessary to carry out their line roles if proposed growth were to materialise. They also assessed the time that might be saved by the new technology that would be rolled out as planned. The interaction between process improvement and trade volume growth would determine the controller’s ability to fulfil their daily duties. A project Governance Committee set the timelines and interim deliverables for the IT project, which was mainly aimed at the trading desk. Our report approximated the full-time equivalent (FTE) impact on Product Control of any delay in each phase of delivery, so the controllers could present a clear argument to the committee to ensure the milestones were met and their needs addressed.