Case study

Business process outsourcing helps CaixaBank ride out banking crisis HP BPO partnership centralizes control to lower costs and quicken integration

IndustryBanking

ObjectiveDrive continued efficiencies in back office process

ApproachOutsourced service provider must absorb new acquisitions, cope with new government regulations and deliver annual cost savings

IT matters• Aligned business process with HP hardware,

improving interoperability and lowering supplier costs

• Created a roadmap of new business process innovation, keeping CaixaBank ahead of the competition

Business matters• Delivered annual savings of 3 percent,

as per contract

• Maintained operations within Spain, meeting CaixaBank’s social responsibility commitments

• Provided the capacity to absorb new acquisitions, allowing the business to consider new projects

“The branch will play a different role in the future. It may be a home for commercial conversations, not transactions. We’re working with HP to look at how we can migrate branch operations to the back office, and then to HP. There is an opportunity to reinvent what a bank looks like.”– Beatriz Kissler, bank services operations director, CaixaBank

Central control and standard processes provide solid base for CaixaBankThe Spanish banking sector is suffering a slump. To get through the crisis, banks have to cut costs and drive efficiencies throughout their operations. Working with HP Business Process Outsourcing, CaixaBank has lowered the cost of its services and facilitated the integration of new acquisitions. The partnership is looking to reinvent how a bank of the future will operate.

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Challenge

Consolidation and cost-controlCaixaBank is Spain’s leading bank. It is a sector under much strain, having to cope with the fallout from a collapse in the real estate market and a recession across the European Union.

The response has been consolidation and cost control. Across Spain branches are closing, smaller banks have been acquired by larger players and, in some cases; the government has been forced to bail-out the most severely affected.

CaixaBank, while not immune to the broader difficulties, remains buoyant. It has acquired a number of regional banks, including Banca Civica, a rival savings bank and Banco de Valencia in 2013.

The challenge now is to integrate the new acquisitions as efficiently as possible, lower the cost of operations and rebuild confidence in the banking sector.

Solution

Central control, standard processIn terms of employees, branches and administration, the acquisitions have swollen CaixaBank at a time when the Spanish banking sector is cutting back. The business numbers 6,400 branches and 34,000 employees at present. CaixaBank generates approximately 600 million transactions a year, a figure expected to rise by 20 percent with the addition of Banca Civica and a further 10 percent with Banco de Valencia.

While the acquisitions boost CaixaBank’s national coverage (it had previously been strong in its home territory of Catalonia) it needs to integrate the new additions quickly and cost effectively. To help do this efficiently, while retaining a focus on service integrity, it needs to outsource much of its banking operations. This would enable the bank to focus its talent and resources on value-added business objectives.

Being a hands-on operation, CaixaBank also wanted greater visibility into banking operations. A near real-time control platform would give employees anytime; anywhere access to complete, up-to-date data enabling employees to make knowledgeable and informed business decisions. Beyond enhancing visibility, a robust new platform would also modernize the bank’s critical back office operations, such as payment processing and issue resolution. Both directly impact CaixaBank’s profitability, as well as its corporate image and level of social trust.

Near real-time business monitoringHP began by defining a business model for CaixaBank, and then worked with the bank to develop business indicators to focus information gathering.

This involved adapting a commercial, real-time systems monitoring product for real-time business monitoring, while capturing data from disparate sources.

Case study | CaixaBank

Case study | CaixaBank

“HP provided a complete solution from consulting to systems operation,” says Luis Ramos, IS project manager, CaixaBank. “It was dedicated to understanding how CaixaBank works. The solution platform and interface adapted to the business needs of business operators and managers. HP also streamlined communications with IS and infrastructure groups at CaixaBank.”

Today, 40 users in CaixaBank’s Banking Business Operations rely on the system to monitor and manage operational control. The system is displayed on several giant projection screens, providing up-to-the-minute operational status across the bank’s headquarters. Employees then take action on their own screens as soon as an alarm is raised.

Not all banks are equal“From the outside, a bank is a bank, just a bank,” says Beatriz Kissler, bank services operations director, CaixaBank. “It isn’t. Each bank has different customers, services and processes. Each has developed differently.”

HP is one of two Business Process Outsourcing partners working with CaixaBank (Kissler says she likes to retain a competitive balance). It plays a crucial role in the integration and the increasing need to cope with new government regulations.

“All our processes are now centralized. We need to bring in every one of the new banks’ services, spot the differences and standardize them. In addition, the regulatory environment has changed completely. There are new laws every two or three months. There is far more risk analysis and transparency – and we’re doing this because we want to, not just because we’re being told to. It’s good for business.”

Kissler says, while many of the processes have been outsourced to HP, the jobs remain in Spain: “We have not offshored this work – and that is a very important social responsibility for us right now.”

Benefits

Automation and technology roadmapThanks to HP’s leading-edge business monitoring solution, CaixaBank has been able to better maintain and control banking operations, as well as outsource its most important business processes with confidence.

In addition, the bank has gained the tools it needs to perform in-depth, thorough business analyses to enhance back office operational control.

“The new operational business control center has transformed CaixaBank’s back office operations, making them more effective, while reducing the number of professionals involved,” says Kissler.

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4AA4-8939ENW, October 2013

Case study | CaixaBank Kissler wanted a BPO partner with a technology roadmap. Since starting work with HP in 2006, she has pushed more work out to the BPO provider, cutting costs within the bank and placing the onus on HP to find innovative ways of refining processes. “Our margins are lower, it is only right to expect our service providers to help us. We expect 3 percent savings each year, and want HP to use its technology advantage to help find efficiencies.”

It is win-win, she says, as the more savings HP can generate the more services CaixaBank will outsource.

By reassigning more than 20 employees to value-added tasks, the bank has improved productivity per operator by 50 percent. This reallocation of resources creates exciting new opportunities for employee development, improving employee satisfaction and, as a result, CaixaBank’s overall customer service experience. HP maintains the platform and continually enhances the solution by adding new business indicators and new infrastructure functionality. Indeed, the solution has proven itself through the unprecedented flexibility, availability and automated reporting capabilities it brings to CaixaBank’s business vision.

Kissler says it is only through the HP’s automation and ability to take on more services that the business has been able to ride out the storm. “It’s fair to say some of the most troubled banks were the ones with decentralized processes, with less standardization. We have a reputation for tight credit and tight systems.”

The relationship with HP began with outsourcing head office functions, but the focus has now shifted to branches: “The branch will play a different role in the future. It may be a home for commercial conversations, not transactions. We’re working with HP to look at how we can migrate branch operations to the back office, and then to HP. There is an opportunity to reinvent what a bank looks like.”

Learn more at hp.com/go/BPO

Customer solution at a glance

Hardware• Mid-range servers integrated to

Mainframe servers

Software• Open systems, Linux, Java™ on virtualized

environment

HP services• Business Process Outsourcing (BPO)

• Applications development to support BPO and centralized control