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Centers Of Excellence: The Future Of Innovation In BFS

Banking Service BFS January 5, 2021
Centers Of Excellence: The Future Of Innovation In BFS


Centers of Excellence (Global Centers) double the speed of banking digitalization:

  • Banking & Financial Services (BFS) companies are actively establishing global centers for various functions across locations and collaborating with service providers.
  • Cities like Warsaw (Poland), Mumbai (India), and Ohio (USA) have a vibrant IT environment and digitally-skilled talent and therefore great placed to develop global centers.
  • Certain tier 2 locations such as Seattle, and Houston are also emerging as key locations to establish a low-cost global center.
  • Banks such as HSBC, the Royal Bank of Scotland, and DBS bank, have leverage such centers to reduce talent costs by 3X.
  • This whitepaper will highlight the key talent hotspots, skill sets, and costs related to CoEs. To download the full report, click here.

Download our comprehensive report on the adoption of CoEs in Banking and Financial Services and how firms can leverage Global Centers for complex processes and innovation in “Finance & Accounting” business function.

With 2020 being marked by widescale disruptions, enterprises are turning towards their CoEs for guidance. Centers of excellence bring together disparate parts of an organization that sits outside the traditional reporting structure to form a powerhouse of innovation. 

By injecting best practices across functions & bringing consistency, a CoE can help centralize all the organizational information and knowledge, paving the way for setting up a single source for all trusted information. Streamlined functions and access to accurate data can help business leaders play their part in driving positive business outcomes and improving the bottom line. 

Those who still havent joined the CoE bandwagon are now convinced of the benefits of such an internal structure.  

Traditionally, enterprises adopt CoE for: 

  • Fostering Research & Innovation  
  • Data governance and integration  
  • Implementing Change management 
  • Establishing & promoting best practices 
  • Reducing duplication of efforts across initiatives 

While establishing CoEs are an age-old industry practice, we are seeing an increase in enthusiasm to establish such centers from the ground-up, especially in the BFS sector, owing to what we can surmise as a fallout of the pandemic. 

BFS Sector At The Forefront of CoE Adoption 

Banking & Financial Services (BFS) firms are aggressively setting up CoEs for different business functions across existing and greenfield locations and working together with service providers. 

A few examples of such efforts are below: 

  • HSBC has developed a new Risk and Compliance Centre of Excellence in Scotland. 
  • Mphasis is in talks to work with RBS to deliver advanced transformation to Testing services through its Testing Centre for Excellence (TCoE) in London. 
  • DBS Bank and IBM announced they are working together to scale an enterprise-wide Centre of Excellence (COE) in Robotic Process Automation (RPA) 

However, even though CoE activities are spread across Finance & Accounting(F&A), Legal, HR, IT & even marketing, this whitepaper notes that the bulk of innovation is in the F&A vertical.  

With many digital tools and BPM solutions available in the market to solve financerelated challenges, BFS firms are aggressively setting up F&A CoE across locations.  

Consequently, we have chosen to dive deep into F&A. 

What Does It Take to Set up an F&A CoE? 

Designing an effective CoE requires firms to understand the propensity of functional activities ideal for CoE based on the corresponding workloads’ complexity and maturity.  

In F&A especially, the complexity of setting one up varies greatly within sub-functions themselves.  

Based on a meta-study, we found that in just the Risk Management subfunction, while the complexity is low for Financial Risk Analysis, it increases manifold for Interest Rate Risk Management, even when the overlapping functions of these two subdivisions are taken into accountHere, the subdivision complexity is directionally defined based on relative workload maturity. 

Below is one such complexity model we arrived at after analyzing data from over 100 BFS companies. FA_Table

However, identifying sub-functions & sub-divisions is only part one of the CoE processes. Part two, which most enterprises fail to implement correctly, recognizes the right location to set up this CoE. 

Location Analysis for BFS CoE 

The success factor of a CoE is highly dependent on the presence of robust finance ecosystem in the target location with the following components: 

  • Project Partners  
  • Custom Platforms  
  • Generic Platforms 
  • Start-ups 
  • Customer Research Labs 
  • Customer Innovation Teams 

These locations also have the advantage of being cost-effective with matured talent pool availability.  

Locations such as Mumbai (India), Ohio(US), Warsaw (Poland) fit the bill perfectly. 

In Poznan, Poland, the factors of top BFS companies presence and a matured talent pool availability comes together to create the ideal location for a CoE. Draups University Ecosystem tool predicts the availability of about 8-10,000 relevant talent for F&A per year here 

A similar analysis for Mumbai, India, also paints a highly favorable picture with talent availability in the 20k range per year for F&A activities. To gain more insights, download the report highlighting talent estimates, talent cost, experience split & talent availability by business unit, and more parameters accompanying this whitepaper. 

Setting up a CoE, while undoubtedly a mammoth task, is aided in no small extent with the ready availability of location/talent data and with actionable insights delivered out of this data.  

Draups proprietary  Talent dashboard features talent across 1500 locations and 28 industries. The platform is loaded with a dataset of 450 million professional profiles, carefully segmented across business functions and job locationsStakeholders can perform skills analysis for in-demand, niche roles in emerging technologies, and gain insights on talent trends to establish CoEs 

Moreover, the platform also delivers key insights into the existing peer ecosystem at a given target location and features their business intentions & digital themes to aid in strategic decision-making. 

Lead the future with talent intelligence. Get in touch with us today.