The Situation
A consortium of mortgage banks had decided to join forces within an integrated holding company, Mortgage Holding*. The consortium expected significant synergies as a joint nationwide player. However, the individual mortgage banks within Mortgage Holding all had different technology platforms (e.g., custom vs. standard software) without any standardization for non-differentiating tech functions. Further, none of the legacy platforms addressed Mortgage Holding's requirements. We were asked to advise on the following issues:
- What technology strategy best fits Mortgage Holding's business strategy, both now and in the future?
- How can the company align different stakeholders to one common technology vision?
- How should the functional architecture be designed?
- Can standard software be leveraged?
- How can the new technology strategy be properly implemented?
Our Approach
We created a three-phase approach to develop and support the implementation of the technology strategy.
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Our Recommendations
Through full alignment of business objectives with the new architecture and governance structure Mortgage Holding can better integrate bank processes, thus achieving efficiency and synergy.
Build standard software-based IT architecture:
- Consolidate core functional software modules across business lines
- Follow "one system" approach for system selection
- Migrate stepwise into target architecture based on sound integration architecture
Develop lean IT governance structure:
- Centralize IT management on holding level with holding CIO
- Entrust board IT council with governing IT investment decisions
- Hold CIO responsible for IT strategy design (incl. veto right) and execution
- Ensure direct link between business/IT along business lines
- Maintain transparent, open service provider relationship with internal holding mortgage loan processor or external service provider (ESP)
The Results
Design, agreement and successful implementation of a business-aligned technology strategy will generate approximately 40 million Euros in benefits.
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* We take our clients' confidentiality seriously. While we've changed their names, the results are real.