business architecture and innovation experiences in ... bank headquartered in zurich, ... are listed...
TRANSCRIPT
October 30, 2012
Gillian Christie, Managing Director
Andreas Kalkum, Vice President
Experiences in Establishing
Business Architecture in a
Global Financial Institution
Business Architecture and Innovation
Agenda
Credit Suisse – a global bank
Challenges in banking
The business architecture response
Business Architecture & Innovation 2
Credit Suisse Group today – key facts
Global bank headquartered in Zurich, serving clients in private banking, investment banking and asset management.
Registered shares of Credit Suisse Group AG (CSGN) are listed in Switzerland (SIX) and as American Depositary Shares (CS) in New York (NYSE).
Total number of employees: 48,200.
The Group’s long-term ratings are: Moody’s A2, Standard & Poor’s A, Fitch Ratings A.
3 Business Architecture & Innovation
Credit Suisse – A Single Source for Services
The Credit Suisse business model combines the strengths and expertise in Private Banking, Investment Banking, and Asset Management. This combination enables the bank to serve clients globally with integrated solutions tailored to their needs.
Integrated Advice Personal relationship managers give our clients access to experts, products, and every service offered by our integrated bank – all from a single source.
Customized Banking Services We offer individualized solutions tailored to our clients' life situations and needs.
Innovative and Comprehensive Solutions We work across divisional borders to serve our clients with innovative and holistic solutions.
Global Reach Our global presence and our partnerships in more than 50 countries allow our clients to transact their financial business anywhere in the world.
4 Business Architecture & Innovation
Agenda
Credit Suisse – a global bank
Challenges in banking
The business architecture response
Business Architecture & Innovation 5
The nature of the Investment Banking industry is
changing; three primary external drivers impact strategy
1. Market
2. Regulatory
&
Internal
3. Client
Challenge Implications for Investment Banks
Be more efficient
Listen and respond to clients
Simplify the target state
Ext
ern
al D
rive
rs
Competitors
Cost
pressures
Margin
compression
Dodd-Frank
International
growth
End of life
platform
Client behavior
New Business
Models
Complexity Reduction
MiFID
Swiss Finish
Basel III
Business Architecture & Innovation 6
The maturity of the market a product is traded in
shapes our approach to reducing business complexity Product Maturity Curve
Highly commoditized products
Electronically traded through exchanges, market
makers and inter-dealer brokers
Illiquid/exotic contract-
based products traded bilaterally requiring high-
touch servicing
Products being pushed towards commoditization
because regulation is forcing an exchange traded and centrally cleared processing model
Description
FX
Commoditization
Cash FI
IRS
CDS
(index)
CDS (single
name)
Exotics
Eq. Deriv.
(OTC)
Energy
Swaps
Improve consistency
and reduce the amount of touch
points between our
firm and clients
Reduce business and technology
complexity by creating
standardized and
automated processing
Manage capital
efficiently by building world-class risk management
systems
Response State
Flow
Hybrid
Bespoke
FX
M.M.
Stock
Exch.
Bond
IDB.
SEF SEF SEF
CCP CCP CCP
IDB
IDB IDB
IDB IDB
C
CS BNY
GS
JPM
DB
IDB IDB
Cash Eq.
Incre
asin
g B
usin
ess C
om
ple
xity
Volu
mes
Incre
asin
g T
echnolo
gy C
om
ple
xity
Note: SEF – Swap Execution Facility CCP – Central Clearing Party
Business Architecture & Innovation 7
Ref
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Ref
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The complexity of the current infrastructure was driven
by product aligned investments
Attributes
Rapid time-to-market for new products
and functionality
Capable of responding quickly to
dynamic business priorities
Product-aligned development (e.g.
multiple risk systems)
High complexity and TCO
Multiple “sources of the truth”
Line-of-business governance
Limited Business / IT accountability for
the platform TCO
Business Architecture & Innovation 8
Dramatically reduce complexity due to
reduced number of business rules
Lowest RtB and TCO without forcing one
solution for all
Allows for a more rapid response to regulatory
and market changes
Enables cross-product reuse
Allows for opportunistic revenue generating
investments without adversely impacting the
strategic core platform
Single golden source for client, product and
book data to reduce reconciliations
The aspirational Target Operating Model (TOM)
supports the strategies of business and technology
Attributes
A product maturity based “three-pipe” model enables us to quickly respond to a dynamic and diverse set of business priorities while
minimizing the impact on the cost or complexity of the core
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds Inst. Inves.
Corporate
s UHNW HNW Retail
Banking
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Flo
w
Hyb
rid
Risk
Besp
oke
Business Architecture & Innovation 9
Investment Portfolio choices
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will
outpace our business growth
Using the Aspirational TOM as a tool to align
investment
prioritization reducing business and technology
complexity will enable successful business delivery
and a lower RtB
Only investing
strategically towards
reducing technology complexity would be
very costly and could
stifle business growth opportunities
Globalizing from
1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
1
Business Architecture & Innovation 10
Investment Portfolio choices
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will
outpace our business growth
Using the Aspirational TOM as a tool to align
investment
prioritization reducing business and technology
complexity will enable successful business delivery
and a lower RtB
Only investing
strategically towards
reducing technology complexity would be
very costly and could
stifle business growth opportunities
Globalizing from
1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
2
Business Architecture & Innovation 11
Investment Portfolio choices
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will
outpace our business growth
Using the Aspirational TOM as a tool to align
investment
prioritization reducing business and technology
complexity will enable successful business delivery
and a lower RtB
Only investing
strategically towards
reducing technology complexity would be
very costly and could
stifle business growth opportunities
Globalizing from
1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
3
Business Architecture & Innovation 12
Investment Portfolio choices
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will
outpace our business growth
Using the Aspirational TOM as a tool to align
investment
prioritization reducing business and technology
complexity will enable successful business delivery
and a lower RtB
Only investing
strategically towards
reducing technology complexity would be
very costly and could
stifle business growth opportunities
Globalizing from
1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
4
Business Architecture & Innovation 13
The aspirational TOM enables a long term strategy for
investment prioritization through transitional states
Ref. D
ata
Legal Entities
LE
LE
LE
LE
LE
LE
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Ref. D
ata
Legal Entities
LE
LE
LE
LE
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LE
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LE
LE
Ref. D
ata
Legal Entities
LE
LE
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Current Logical
Architecture Model
…
2012
?
Transitional
State
.
…
Aspirational Target
Operating Model
Client
Trading
Post Trade
Banking
Finance Ref. Data
Risk
Flow Hybrid Bespoke Risk
Transitional
State
.
…
.
…
Transitional
State As long as we build toward the aspirational TOM, we have still
invested intelligently with outcomes with interim business benefits
Business Architecture & Innovation 14
Agenda
Credit Suisse – a global bank
Challenges in banking
The business architecture response
Business Architecture & Innovation 15
Value
Proposition
Business
Architecture
And
Innovation
Telling the
Story
Transforming
the Bank Managing
the
Innovation
Cycle
Establishing
a common
language
16 Business Architecture & Innovation
Our response: Enable Business Architects across the
Bank to drive transformation towards the target state
We run a jointly sponsored IT/Business design
governance committee
Business Architecture & Innovation 17
IB Design
Authority
Design Authority
Working Group
Risk (SRP) DA
CRO DA Finance
(CFO) DA Ops DA
Reference Data DA
Dodd Frank DA
Prime Financing
DA
Basel III DA
Functional DAs Program DAs
Ratify and escalate DAWG decisions on
IB FTB design
Decisions on design issues
Program level design coordination and
escalation to DAWG
DAs
open / closed/defer design issues
Issues escalated in 2012: DAs > DAWG
Issues escalated1:
DAWG > IB DA n
nn
nnn
Issues escalated to DAWG and IB DA
IB DA Escalation
One of the recommendations - will be raised to
the Design Authority for action and resolution
Closed Design Issues:
Following four design issues were closed since
the last DA update: − […]
− […] − […] − […]
Decisions
• Trade Capture
Architecture
• Back Office Data
Sourcing
• Structured Notes
• Reference Data
• Global Book Master
• Collateral End to End
Issues mandated
Transforming
the Bank
Provides a consistent
framework and common
language across the bank
Provides a platform for mapping resources to
business capabilities
Understand functional
redundancy in the
application portfolio
Helps define the Target
Operating Model (TOM) and align IT architecture
Helps define the scope for
new initiatives and align
initiatives
Helps clarifying
responsibilities and
accountabilities on a functional level
Helps analyze how budgets
are aligned with
underlying capabilities
We provide standard frameworks – our Business
Capability Model is used to drive transformation
Business Capability Model (BCM) Benefits of BCM Benefits of BCM
Establishing
a common
language
via Models
& Tools
Business Architecture & Innovation 18
We train the firm’s Business Architects
Business Architecture & Innovation 19
Telling the
Story
Innovation Aggregators
We aggregate innovation and encourage new ideas
Crowd Source Ideas
Champion Solutions Innovation Exchange
Connect the Dots
Business Architecture & Innovation 20
Managing the
Innovation
Cycle
US Business Architecture Team
Manages AM relationship
Zurich Business Architecture Team
Manages PB & BO relationship
Lead for Tools, Training and Techniques
UK Business Architecture Team
Manages IB relationship
Innovation Team
Facilitates a systematic end-to-end
innovation process to support innovative ideas from generation to
implementation and value realization
Shared Services COO Front Office IT Head of Strategy &
Architecture
Andreas Kalkum
Head of Business Architecture
and Innovation
Gillian Christie
A global team for global challenges
Business Architecture & Innovation 21
Summary – Business Architecture will help Credit Suisse
achieving our vision
Our vision is to become the world’s most admired bank, renowned for our expertise in private banking, investment banking and asset management, and most valued for our advice, innovation and execution.
22 Business Architecture & Innovation
Some think everything has been said.
We think you
might have some
questions.
Q & A
Business Architecture & Innovation 24