New costing model for top-tier SA bank

Project name:
Operational Shared Services (OSS) cost-recovery model for a top-tier bank

Service:
Financial institution expertise

Sector:
Financial services
Business Banking
Corporate and Investment Banking

Area of Expertise:
Financial modelling

Client:
Confidential

Date:
2016

Country:
South Africa


A top-tier South African bank, under increasing cost pressure, needed to relook at the costs of its shared services and the allocation methodology.

The Genesis team developed a revised cost recovery model for the division. The model enabled operations and product management to immediately understand their costs better, to take control of their costs and make informed business decisions.

We provided an assessment of current and new allocations which made sense to operations and to the business, and between businesses where some of the products’ costs went up while others went down.

Through the analysis of available data and drivers of cost recovery, the team built a new cost-recovery model on activity-based costing principles. In this way, Genesis was able to identify opportunities to become more efficient as well as create accountability and transparency in the recovery of cost.

Through constant engagement with the finance, costing and business departments during the process, we ensured that the revised model was accepted as best for the bank. The new costing model will be implemented fully in the new financial year with revised estimates taking into account adjustments this year.

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