Over the last five years, clients, competition, disruptors, central banks and regulators have been urging banks to transform their cost structure, by leveraging technology to overcome operating efficiency and resilience issues inherent to the industry since the last financial crisis. When combined with the pressure of the COVID-19 pandemic, it couldn’t be clearer that not only the front-end has to be digital, but also all back office and support functions. As the recent CFO survey by PWC1 showed, 78% of CFOs, in Luxembourg, are either currently or planning to transform their function over the next three years.
At RBC Investor & Treasury Services (“RBC I&TS”), we are ahead of the game. In 2020, the RBC I&TS Luxembourg Finance team completed the last and critical phase of its transformation strategy to create the finance function of the future. The three-year program included the fundamental transformation of our financial systems, processes and organizational alignment to unleash the power of the finance function.
Leveraging technology and digitization, we have transitioned to more value-added controlling, analytical and leadership activities, and are becoming a true “Business Partner”. We have done our part in improving the efficiency of our own activities, and now are able to spend more time in supporting business leaders in decision-making, so as to fundamentally improve how RBC I&TS’s 1.1 trillion EUR Assets-Under-Administration operation in Luxembourg works.
In 2018 and 2019, the team led the implementation of leading-edge SAP S/4 Hana technology for our financial accounting (integrated General Ledger), COUPA (Purchase to Pay) and SAP CONCUR (Travel & Expense) across 13 out of 16 branches/subsidiaries, in the 10 geographies we operate in Europe and Asia (the “Group”).
In 2020, we implemented the three systems for the three remaining entities of the Group, standardized and centralized Finance operations across all five European locations into a Luxembourg Shared Service center, and implemented SAP S/4 Hana – Group Reporting to enable a fully integrated system for closing, consolidation and statutory & regulatory reporting for all 16 branches/subsidiaries.
With top of the line project management methodologies, such as AGILE, and unbounded thinking and prioritization, we aligned the right expert with the right activities within the program, and partnered with our functional peers across our geographies and head office, IT teams, and others regardless of functional boundaries.
In terms of challenges, delivering such large scale change is never easy. We did have our ups and downs on the technology, budget and timelines front; however, the first and most important variable we focused on was our “people”.
We ensured that throughout the journey all team members were engaged, bought in and aligned to the “meaning” for this change. We proved that shifting finance towards a business strategist and catalyst role, would lead to broader, richer mandates, new skills and long-term career growth opportunities. In addition, we established a “Develop the Team” program to support our employees’ adaptation and future growth with personal, technical, and language trainings, amongst others, that would arm them with the skills needed to succeed in this new world.
The project delivered on several important benefits, such as:
- Reduction by ~55% manual journals and end-user-computing tools (ex: Excel);
- Improvement of ~20% the month-close, consolidation and reporting timelines;
- Decommission of 8 legacy GL, consolidation & reporting systems;
- Achievement of ~30% synergies in processing and accounting activities across Europe, and
- Boost by ~20-25% controlling, analyzing and business partnering activities.
We are now benefitting from enhanced connectivity, transparency, risk-based approach to controls, and business intelligence thanks to this integrated daily digital financial information flow across our Group and with RBC. As an example, when faced with the COVID-19 crisis in 1Q/2Q20, having all of our entities on the same integrated ledger (SAP S/4 Hana), we were already able to navigate the record transaction volumes and changes in global monetary policies, with higher transparency and visibility to the financial results across the Group.
In line with our vision, embracing this digital transformation has enabled us to unleash substantial capacity to focus on our business partner role, on driving performance, and on activities ultimately value-added to our stakeholders and clients.