Coeus Consulting supports challenger bank with digital journey

Professionals from Coeus Consulting have helped a client in the banking sector find a digital partner, who will help modernise the bank’s core platform to adapt for the challenger bank market. In order to facilitate this, the consultancy helped draw up a rigorous contract for the partnership, as well as ensuring a competitive selection process to ensure value for money.

Throughout the banking new challenger banks and FinTechs are attacking business models, with newcomers rapidly making inroads into the sector’s profits by offering agile, digitalised alternatives. In retail banking, the disruption of challenger banks is visible across the value chain, from customer contact and lending to mortgages, payments and alternative financing.

At the same time, the likes of Monzo, Starling and TSB have all launched a marketplace banking offering. In response to this, many traditional banks have looked to protect their market share by collaborating with digitally savvy startups, rather than fighting them.

As the UK’s financial sector continues to change rapidly, a bank with a traditional heritage recently engaged Coeus Consulting to help develop a cost-effective and robust agreement with a digital partner.

This could facilitate the bank’s modernisation of its core banking platform and IT services model, and adapt it for rapid growth in the challenger bank market. As well as looking to expand, however, it also needed to address the high levels of uncertainty for a challenger bank's digital journey – with many challengers still struggling to win business from historic banks.

Coeus Consulting is an independent IT advisory that empowers technology, business and procurement leaders to deliver strategic change to the business. Through 2020 Coeus Consulting has taken on a raft of further transformation projects, including helping Southend-on-Sea Borough Council address various digital challenges relating to the Covid-19 lockdown, and helping a prestigious London university to up its digital game, in response to social distancing measures in Britain.

The digital transformation specialist had to contend with a number of challenges during the project, including first generation outsourcing, with the need for extensive contractual protection in line with FCA regulations. The Coeus team tackled the challenge of uncertain requirements by drawing upon their experience and expertise in other financial services contexts to bridge gaps in client specific insight.

At the same time, the client’s Transformation Director recognised the need for external expertise in contract drafting and help to develop an effective negotiation strategy – especially as the decision by senior stakeholders to form a strategic relationship with a preferred digital partner meant there was reduced competitive tension and leverage available, even at this early stage of the programme. According to the consultancy’s website, Coeus developed an effective negotiation strategy including clause by clause negotiation guidance and issue tracking.

Coeus also developed and ran a supplier evaluation process to support the executive requirement, to move to preferred supplier while creating a rigorous audit trail for the recommendations reached. The firm then went on to support the face to face negotiations. The client benefited from this effective negotiation strategy and approach, which empowered the team and maintained a threat of competition in order to retain leverage within a single source dialogue.

Overall then, the engagement delivered a cost effective but comprehensive contractual agreement. This formed a firm foundation to enable the client’s growth ambitions whilst driving performance accountability and commercial flexibility from the supplier.