case studies and success stories
5 STORIES: How Broadridge Financial Services Business Process Outsourcing tackles clients’ toughest challenges.
EXPERT GUIDANCE DURING LEHMAN BROTHERS BANKRUPTCY
ADVOCACY FOR BROADRIDGE CLIENTS
A TIER 1 GLOBAL FINANCIAL SERVICES FIRM
A GLOBAL BANKING AND FINANCIAL SERVICES COMPANY
A TOP-FIVE DEALER IN THE MORTGAGE-BACKED SECURITIES MARKET
These five stories illustrate how a strategic partnership with Broadridge helps clients transform, innovate and gain transparency. Being part of the large Broadridge network, each client benefits from leading technologies, world-class operations, best people, best practices, scale, and mutualization of compliance cost and innovation investment.
You’re ready for what’s next when you’re part of the Broadridge network
the solutions
Broadridge business process outsourcing
• Laid a foundation for future growth via the modern, scalable post-trade processing platform • Accelerated savings and reduced risk by having business process outsourcing take over post-trade operations before converting to the new equities platform • Achieved savings through mutualization of regulatory costs • Significant efficiency gains from Broadridge’s in-depth industry experience and operations expertise
the results
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the challenges
• An aging proprietary technology platform for U.S. equity and non-dollar processing that could no longer be supported • Technology that couldn’t support T+2 settlement • High system upgrade costs associated with regulatory changes • Complex systems leading to maintenance and support challenges • Inability to scale for future growth
The Client
3 Broadridge
A primary dealer and a top-five dealer in the mortgage-backed securities market
Reducing costs and optimizing operations with a modern technology platform
case study
Broadridge Equity Post-Trade Processing solution
take a deeper dive
4 Broadridge
The firm shifted from an in-house technology and fixed-cost staffing model to Broadridge’s mutualized investment model. By using Broadridge Financial Services Business Process Outsourcing, the firm improved services to its clients, gained scale for future growth and met regulatory requirements. Additionally, it reduced operational risk while continuing to benefit from best practices, leading technology, world-class operations and innovation.
the key takeaways
• Reduced operating costs by 30 percent • Realized ROI within the first year • Gained dramatic savings through mutualizing costs of regulatory changes • Maintained business continuity and mitigated risks throughout the transition • Gained scale to support future growth and international expansion
• Need to transition out of its U.S. equities and mortgage-backed securities trading business cost-effectively to focus on its fixed income primary dealer business • High regulatory compliance costs • Aging proprietary technology and infrastructure • Increasing human resources and facility needs
5 Broadridge
A global banking and financial services company and primary dealer
Transforming operations to support a new business focus
Broadridge Fixed Income Post-Trade Processing solution
6 Broadridge
The firm underwent a major transformation to focus on its primary dealer business. Broadridge Financial Services Business Process Outsourcing provided the agility to transform smoothly, significantly reducing costs and future-proofing for growth opportunities.
the solution
• Freed resources to focus on differentiating activities by outsourcing non-core functions • Significantly reduced cost-per-trade to make more operating capital available • Enhanced client service and reduced risk
7 Broadridge
• Need to increase operational and cost efficiency • Increasing challenges to manage risk effectively • High cost-per-trade • Unable to scale effectively and fuel growth
A tier 1 global financial services firm engaged in investment, personal and corporate banking, and wealth management.
Achieving breakthrough operations improvements to fuel growth
8 Broadridge
With Broadridge Financial Services Business Process Outsourcing, this global firm realized significant cost savings and increased straight-through processing rates within the initial contract year. In fewer than six months, the firm upgraded from Broadridge technology to a full Broadridge business process outsourcing solution that included operations and technology. Today, the firm is ideally positioned to tackle new opportunities for long-term growth.
The National Securities Clearing Corporation (NSCC) imposed restrictions on securities eligible for Continuous Net Settlement (CNS), which significantly increased the number and cost of trades settling “trade for trade.”
SITUATION 1:
situation 2
situation 1
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9 Broadridge
When financial industry rules and regulations negatively impact businesses, a strong advocate can speak for them and provide innovative solutions. Broadridge operations experts actively participate in leadership roles on key industry committees to advocate for clients.
Industry advocacy on behalf of clients, saving firms millions of dollars
Costly CNS Restrictions
The Outcome:
Broadridge advocated for the NSCC to include items in the balance order process without the NSCC trade guarantee and to process net transactions in the same way it processed certain foreign securities, which resulted in saving the industry more than $1 million per year.
SITUATION 2:
Globally Locked Securities Limitations
The Securities and Exchange Commission (SEC) prohibited the movement of globally locked securities between brokers, resulting in a capital charge for aged trades.
Broadridge advocated for temporary transaction processing with Depository Trust & Clearing Corporation (DTCC). As a result, DTCC granted a three-day window for processing and allowed broker-dealers to reinvest their reserves.
success storY
10 Broadridge
Broadridge operations leaders participate in numerous Securities Industry and Financial Markets Association (SIFMA) committees, DTCC committees and industry societies. Their advocacy on behalf of clients helps financial services firms resolve regulatory issues, gain operational savings, and innovate for the future.
Broadridge’s post-trade processing platform was used by dozens of financial institutions, including Lehman Brothers. The platform’s common data and infrastructure made it possible to quickly distinguish and separate Lehman asset management positions from its brokerage holdings • Client assets worth billions of dollars were extracted within one week • Neuberger Berman, Lehman’s former asset management unit, continued operations while Lehman became insolvent • Broadridge transferred Lehman’s brokerage assets into Barclays and insulated assets worth billions of dollars from bankruptcy
the outcome
11 Broadridge
Saving billions of dollars during financial crisis
When Lehman Brothers filed for bankruptcy protection, the largest corporate bankruptcy filing in the U.S., global market turmoil ensued. Lehman had only one week to extract billions of dollars in client assets from its failing brokerage unit before the Securities Investor Protection Corporation (SIPC) locked up those assets.
the situation
12 Broadridge
In just three trading days, Broadridge’s operations team carried out a platform conversion and asset recovery that normally would have taken more than a year to complete.
bimsales@broadridge.com
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* As of August 2018
© 2018 Broadridge Financial Solutions, Inc., Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. CM_00025_CS_18
Broadridge, a global fintech leader with over $4 billion in annual revenue listed on the S&P 500 index, provides communications, technology, data and analytics. We help drive business transformation for our clients with solutions for enriching client engagement, navigating risk, optimizing efficiency and generating revenue growth.
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Partner with Broadridge to benefit from transformation, innovation and network value. Gain access to deep industry expertise, operational process excellence, leading technology and innovation, and proven governance to realize unlimited business potential with our Financial Services Business Process Outsourcing. Benefit from being part of the network to leverage shared investment and scale and mutualize innovation and compliance costs to drive ROE.
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