Sourcing with Financial Services

How do you, as a financial services provider, acquire the ability to engage in agile sourcing? Why should you do this at all? With the rapid progress of digitalisation in banks and insurance companies, the nature of sourcing and the requirements for sourcing management are also changing. They must be technically, organisationally and commercially capable of linking or exchanging external as well as group-internal service offers similar to an app. This goes well beyond traditional sourcing. Whether digital or traditional sourcing moves you: we are happy to support you!

The burning topic in the financial industry is fintechs. Banks have to face new competitors and master the leap into a digital future. Strategic IT sourcing has a key role to play here. Whereas in the past the focus in sourcing was usually only on reducing costs, today other issues are coming into view – for example, quality assurance of the company’s own IT or access to external expertise when resources are scarce. Because the competition never sleeps. The value chain is being broken up by the new competitors, with fintechs specialising in the most lucrative individual segments. The result: Financial companies that are well and broadly positioned today will be dependent on collaborative partners in the digital future. This is the only way they can remain competitive and open up new prospects.

How KPMG can support you

IT sourcing strategy

Our experts develop individual IT sourcing strategies tailored to your specific needs. We analyse your business entity’s IT landscape and derive potential sourcing options. The following questions are the focus here:

• Internal vs. external service provision
• Location of service provision (onshore, nearshore, offshore)
• Single vs. multi-provider strategy
• Digital sourcing strategies

Provider selection and contract management

As part of the implementation of the IT sourcing strategy, we help you with the invitation to tender, the subsequent provider selection and the drafting of the outsourcing contract. Together with you, we determine the requirements for the service provider and define the decision parameters. In addition, we support you in the creation of adequate service level agreements and a flexible pricing model. Only in this way can you enter into a successful partnership with a service provider.

Target operating model and sourcing management

Once the outsourcing contract has been signed, the focus is on the model by which you and the service provider will work together in the future (“target operating model”). Of particular importance here are its implementation in everyday business and the establishment or expansion of a sourcing management department in your business entity. This department bundles the control and knowledge for a successful relationship with the service provider. Another essential component of the target operating model is the establishment of a governance structure as a link to the service provider.

We help you establish the target operating model, set up a sourcing management department and implement a suitable governance structure.

Compliance

Regulatory requirements are of particular importance in the financial sector. We prepare you for possible audits by the supervisory authority by simulating the audit process with you. In this context, the outsourcing relationships are examined with regard to the fulfilment of the regulatory requirements under §25b of the Banking Act (KWG) and the Minimum Requirements for Risk Management (MaRisk). If we find weaknesses or risks, we help you to resolve them.

For more information on KPMG’s flexible and efficient IT sourcing optimisation options, please download our product sheet here.