- Case study
Accelerating a global bank's earnings release
How Genpact reinvented the bank's financial close processes to enable faster earnings reporting to the street
A multinational investment bank
We helped the bank redesign its financial close process, integrate data flow between its front, middle, and back offices, revise policies, and optimize its finance and accounting digital technology investments.
A stress-free and more effective financial close process that sped up its earnings release and improved user experiences.
Transforming financial controllership processes for financial services institutions has been an uphill battle. The reason: The industry has unique and complex issues with valuation controls, capital planning, internal controls, and change regulations when it comes to closing the books. Traditionally, bank CFOs and their teams have struggled with opaque, complicated, and inefficient close cycle processes and with business units that take too long to provide numbers.
Challenge
Our client was experiencing these issues firsthand. Upstream transactions data stored in the bank's central data repository – its financial data warehouse – only flowed to the general ledger during the intense, compressed month-end closing process. Moreover, external dependencies for valuation and revenue booking further delayed it. Meanwhile, too many disparate in-house systems stored fragmented pieces of vital data, creating interface issues and encouraging redundancies in reconciliation and other closing activities.
This meant that critical financial data became available only inconsistently, making it difficult for the accounting team to retrieve and appraise. Valuation, independently of the price verification process, moved slowly, impacting mark-to-market review and downstream processes. At the same time, automation was inadequate. Poorly coordinated sub-ledger and general ledger inputs forced people into making manual, time-consuming, and frequent but nonmaterial adjustments to the books. Audit trails weren't traceable, and compliance took more effort than necessary.
These challenges took their toll. Longer close cycles meant the company was behind its peers in getting its earnings report out to the street. Insights became delayed, impacting decision-making and resulting in suboptimal employee and stakeholder experiences.
Solution
First, we worked with the bank's finance team to conduct a thorough assessment of its existing close operations. To that end, we held design thinking workshops with a broad segment of the finance and accounting team to deep-dive into their challenges and pain points. We conducted 150-plus meetings and spent 2,000 hours of collective time to understand the bank's close cycle process with help from our proprietary framework assets, ProcIndex and Continuous Close Accelerator.
Then, we put our transformation roadmap to work.
We reshaped the bank's month-end general ledger and sub-ledger closing process. We integrated every aspect of it, making it holistic and seamless. We improved the data feed and made it easier to access, bringing in automation and introducing analytics across all upstream and downstream activities. We looked at every other factor that closing touched, too, including product control, liquidity, and risk management. And we focused on ways to reduce peak load using centralized governance and embedded controls.
Our three-pronged approach – process simplification, a new policy framework, and technology updates – played out in the following ways:
Impact
The bank now has a faster, more structured, efficient, and effective financial close process that has decoupled from other bank processes that do not affect close. Nearly 90% of reconciliations have become automated and the entire close process has become 90% standardized.
As a result:
Most importantly, the investment bank is now close to becoming best in class in releasing earnings while operating at a lower overall cost of finance as a result of the transformation.