Bank delivers a best-in-class tax offering for global investors

Supporting faster, more accurate responses with Icon Solutions

Published on 05-Apr-2013

"Now that we can instantly access all documents relating to a particular client, we can retrieve reliable information on any customer at any time and respond to requests in hours rather than days." - Head of Global Custody

A global bank


Deployment country:
United Kingdom

Business Process Management (BPM), Enterprise Content Management, Service Oriented Architecture

IBM Business Partner:
Icon Solutions Ltd


This bank operates the world’s largest financial services network, spanning more than 15,000 offices in over 100 countries, and manages several hundred million customer accounts. The company provides consumers, corporations, governments and institutions with a broad range of financial products and services.

Business need:
The tax department in this global bank relied on paperwork and spreadsheets to monitor and manage clients’ tax rates. This expensive, manual approach was decidedly non-scalable.

The bank partnered with IBM and IBM Premier Business Partner Icon Solutions to find ways to cut the paperwork, improve client service and introduce an industrial-strength business solution.

Bank clients benefit from the optimum tax status based on automated process management and workflow. The bank has cut operational costs, reduced error rates and introduced client self-service.

Case Study

This bank operates the world’s largest financial services network, spanning more than 15,000 offices in over 100 countries, and manages several hundred million customer accounts. The company provides consumers, corporations, governments and institutions with a broad range of financial products and services.

In the UK, the bank’s global custody services division forms a key component of its business. The division serves tens of thousands of clients in public-sector organisations, financial institutions and corporations around the world.

Maintaining the bank’s leading edge in the custody services market is no easy task. Global custodians are required to manage increasingly complex tax and legal requirements, all while meeting the needs of clients who are constantly seeking to secure the best investment opportunities and tax status.

The Head of Global Custody notes: “Over the last ten years, there has been a significant increase in the complexity of the processes and legal requirements for tax operations. Authorities around the world now require greater levels of documentation, in an attempt to tackle tax evasion. On top of this, competition in the financial services industry has become much more intense, which makes it crucial for us to respond more quickly and effectively to customer needs.”

These developments have raised considerable challenges for the company’s asset managers, prompting the bank to transforming its tax department into a more agile organisation.

“As our list of clients grew, and their tax requirements became more complex, we needed to find a faster, more accurate way of handling tax information. Previously, we relied on a manual system of hard copy filing and spreadsheets to record and store data on our clients’ tax affairs. Finding and analysing the right documents was a time-consuming process: it would often take staff five days to complete a request on a specific client account.”

Better control and confidence

The bank identified that a three-pronged approach was required to streamline the handling and processing of tax documents. First, document images and data needed to be scanned; next, information needed to be stored in a central database where it could be easily accessed and retrieved; and finally, analysts needed a way to report on the information, using key trend statistics and hard facts.

The high-level objective was to implement a solution that could scale up to support increasing client numbers and workload without a corresponding increase in administration or complexity. The bank engaged IBM to design a solution that would eliminate paper-based processes, optimise control of client data and maximise business efficiency.

IBM recommended that the bank engage with Icon Solutions Limited, an IBM Premier Business Partner with extensive knowledge of and experience in the financial services sector. Icon identified the needs of the business, and designed and built a solution that would support these requirements.

Icon started by replacing paper-based record-keeping with electronic document management, based on IBM® Content Manager. Next, Icon designed a global custody tax application that integrates document management with the business workflow and automates the majority of processes involved in keeping client tax documentation up-to-date.

Icon has subsequently extended the original application to encompass multiple custodian process steps. For example, the application takes real-time data on tax rates and applies the changes on each client’s account. When clients ask for tax information, bank staff can find correct, up-to-the-moment data at all times.

“We extended the original application to support our ability to provide tax rate information to clients in different markets. Once the data has been populated in the system, it is possible to look up a client, hit a button and pull up a report on the tax rates relevant to that specific client account. This is just another way of taking the complexity out of the process and serving clients in a meaningful way.”

Built on IBM Business Process Manager

The tax software was written in Java, designed to run on the IBM Business Process Manager platform, a service-oriented architecture (SOA) integration environment. By selecting the Business Process Manager suite as the foundation stone, the Icon team focuses on tailoring the application interface, the business functionality and the reporting capabilities to maximise productivity gains. The application calls on pre-built services provided by IBM Business Process Manager, a feature that accelerates application deployment and reduces development and integration costs.

For example, if a client moves to a new tax jurisdiction, this invokes requirements for declarations of tax status (the US W8-BEN forms are a familiar example). The jurisdiction status change automatically triggers a business process to refresh the relevant documents, and IBM Business Process Manager provides the capability to ensure that each step is completed correctly and linked to the next.

A core advantage of building applications in the Business Process Manager environment is that extending and scaling the original solution is made easily possible. From a single application environment, the platform can be scaled up and out to support growing functionality and increasing workload in an almost linear fashion. Developers are able to focus application functionality and business value, while the Business Process Manager platform provides ultra-robust resilience, scalability and process management services.

Boosting efficiency and cost-effectiveness

The integrated tax solution has transformed the bank’s tax department, moving it away from tedious and time-consuming manual processes to a centralised, streamlined system. The introduction of an integrated set of automated workflows has improved productivity, reducing the number of staff needed to process documents in the division’s operations centre by 20 percent. Efficiency improvements are particularly important for a bank’s cost-centre departments, where driving down administration expenses is a high priority.

By powering improved standards and processes, the software makes it much easier and more cost-effective to ensure regulatory compliance with new directives. The bank can simply use IBM Business Process Manager to invoke and orchestrate the relevant components to handle new processes.

The bank has also accelerated the speed at which information is made available to asset managers and clients. “In the past, when customers would request a summary of various aspects of their tax affairs, it would typically take us two man-days to pull together all the documents and information needed to produce a report.

“Now, we can create these kinds of summaries almost instantly. It is also easy for us to generate custom reports, based on a client’s individual requirements, so we can give our clients exactly what they want.

“We have digitised our client documents, and we store them in a central repository instead of in multiple spreadsheets. Now that we can instantly access all documents relating to a particular client, we can retrieve reliable information on any customer at any time and respond to requests in hours rather than days.”

Because the tax applications are managed by IBM Business Process Manager, which includes web application services, it is also possible to give clients direct, secure access to information via the web. This kind of self-service functionality, delivering validated real-time data to clients, provides distinctive customer service value that few, if any, other global custodians are able to offer.

The Head of Global Custody concludes: “IBM Business Process Manager ticks all of the boxes for us, and the tax application has really changed the whole outlook of the department, in terms of new opportunities and what can be achieved.”

Products and services used

IBM products and services that were used in this case study.

Content Manager, Content Manager, IBM Business Process Manager Standard

Legal Information

© Copyright IBM Corporation 2013. IBM United Kingdom Limited, PO Box 41, North Harbour, Portsmouth, Hampshire, PO6 3AU. Produced in the United Kingdom. April 2013. IBM, the IBM logo and are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at: IBM and Icon Solutions are separate companies and each is responsible for its own products. Neither IBM nor Icon Solutions makes any warranties, express or implied, concerning the other’s products. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation.