Mckinsey - Efficiency in IT Spend in Investment Management and Private Banking

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Efficiency-Led IT Transformation in Investment Management and Private Banking


McKinsey helped reduce IT and operations spending for the global investment management and private banking division of an international wholesale and retail financial institution.

Background
The global investment management and private banking division of an international wholesale and retail financial institution had very low transparency into its technology spending. Its technology group was mandated to cut spending as part of a corporate cost-reduction program.

Analysis and Teamwork

After the technology group turned to McKinsey, the McKinsey team helped establish better transparency by first reviewing the client's IT spending and then classifying it into common cost categories across units. The team also identified short-and long-term cost improvement opportunities. It reviewed initiative governance and vendor management against best practice and then established an IT governance team within the businesses. The client launched initiatives to improve financial and time tracking, and set up a new model to manage key vendors.

Results

McKinsey's plan resulted in the client reducing its spending on technology and operations by 11%.Project prioritization and re-scoping resulted in annual savings of $12 million-$16 million. Streamlining lights-on maintenance saved another $5 million-$8 million a year, while more aggressive vendor management spurred $18 million-$22 million in savings.