Industry
Banking
Banking Services Transformation: Unlocking Exponential Value
Solution
TCS BaNCS™
TCS BaNCS™: Enabling Transformation in Banks and Financial Institutions
Highlights
- PostFinance is one of Switzerland’s leading financial institutions with around 2.5 million private and business customers.
- Based on customer demand, PostFinance wanted to offer its clients a completely integrated crypto trading solution.
- PostFinance launched crypto services leveraging digital custody capabilities from TCS BaNCS and became the first systemically important bank in Switzerland to launch crypto trading for its customers.
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Overview
PostFinance has successfully launched crypto asset services for its customers in Switzerland, with the TCS BaNCS Global Securities Processing Platform. With this launch, the Bank’s customers can invest and securely manage multiple cryptocurrencies in a convenient and transparent manner.
Philipp Merkt, Chief Investment Officer, PostFinance shares his views on how PostFinance is leading the way in the Swiss financial sector, bringing digital asset trading to its customers.
Please take us through a brief profile of your bank and the context in which you decided to embark on the Crypto transformation program.
PostFinance is one of Switzerland’s leading financial institutions with around 2.5 million private and business customers. It is the first systemically important bank in Switzerland that now brings crypto trading directly to its customers.
The three main reasons for our entry into the crypto markets are:
- Client demand: A substantial proportion of our customers have expressed a need to purchase cryptocurrencies without having to use loosely regulated crypto exchanges. Furthermore, we measured the outflows to unregulated exchanges, and they were substantial.
- Our belief in the promise of blockchain technology and the need to be future ready.
- Learning journey as an organization: This new offering will help us enhance our knowledge levels across all relevant business dimensions such as finance, compliance, business, and IT.
The TCS BaNCS Offering
Why did you select TCS BaNCS Global Securities Processing Platform (BaNCS.GSP) for launching the Cryptocurrency business? What were the key criteria?
Based on customer demand, we wanted to offer our clients a completely integrated crypto trading solution. With the TCS BaNCS Global Securities Platform, we have been able to rely on a well-established solution ensuring integration with our core banking platform, which is also from TCS BaNCS.
Our partnership with TCS in the last ten years has proven the merits of the TCS BaNCS product suite from a globally recognized brand such as TCS, alongside its rich banking expertise, implementation and collaboration skills.
Challenges and Success Factors
During the implementation phase, what were the biggest challenges and key success factors?
The alignment of all relevant stakeholders alongside a high number of affected applications proved to be a challenge. In addition, we faced blockchain-specific technicalities, like comma separation rules. As the crypto market is always open, we needed to find new ways of offering 24/7 trading.
On one hand, clear communication of the business goals for a high priority project such as this, and on the other hand, the highly motivated and skilled team that worked on the project contributed to its success.
TCS Partnership
Please describe the quality and depth of your partnership with TCS.
During the testing phase, TCS demonstrated exceptionally good responsiveness, even during off-business hours. Going this extramile has led to a smooth crypto market go-live.
Key Benefits
Discuss business and technology benefits from the overall transformation journey across different lines of business – Banking, Payments, Securities, Digital Assets.
Blockchain technology has the potential to disrupt the financial services industry. For the very first time, wealth can be digitally transferred without any involved third party. Within the traditional financial system, security trades are usually settled only after T+2. This means that the final delivery takes place two days after the transaction date. During these two days, the trading partners face additional capital or counterparty risks. Blockchain technology allows atomic settlements - e.g., securities that can be directly settled against cash without any time lag. Having no time lag has a high potential for improving operational processes and reducing financial risks for trading partners.
Roadmap
Do you think that crypto will become an integral part of the Swiss economy? What is your roadmap for digital asset services, and how will the TCS BaNCS Global Securities Processing Platform help reinforce your leadership in the market?
We do not believe that payments in Switzerland will be executed primarily through blockchain payments within the near future. But many clients want to invest in cryptocurrencies. We are looking at enhancing the crypto trading offering in many ways in the near future, one among those being the introduction of a transfer and staking function.
Today, PostFinance’ clients can use a single login for all their daily payments and crypto investments, thanks to TCS BaNCS’ core banking and custody platform which serve as a pivotal bridge between our traditional and crypto finance offerings.
Future Challenges
The issue of regulation has consistently taken center stage in various forums like Davos, with leaders advocating for the regularization of the crypto market. What are the next set of challenges that you foresee in the Crypto market?
One of the key challenges is the international alignment of crypto regulation. The different jurisdictions are on vastly different stages with respect to crypto regulation what leads to regulatory arbitrage. Consistent and comprehensive crypto legal frameworks also include the classification on how nations classify cryptocurrencies (as property, security, currency, or something else). Furthermore, there are current regulatory challenges from the BIS with regards to capital requirements for crypto holdings for banks.
Today, PostFinance’ clients can use a single login for all their daily payments and crypto investments, thanks to TCS BaNCS’ core banking and custody platform which serve as a pivotal bridge between our traditional and crypto finance offerings.
