Products & Platforms
Banking
Banking Services Transformation: Unlocking Exponential Value
Capital Markets
Unlocking Exponential Future Growth in Capital Market Firms
Solution
TCS BaNCS™
TCS BaNCS™: Enabling Transformation in Banks and Financial Institutions
Highlights
- Today, the TCS BaNCSTM solution services the top 3 of the 4 US banks, and a top 3 asset manager.
- TCS BaNCS holds the distinction of servicing the corporate actions processing needs for all segments of the securities industry – asset managers, brokers/ dealers, and custodians.
- Our cross-asset class capabilities enable TCS BaNCS to offer true 360-degree wealth and private banking services that take full advantage of the real-time integration between cash and securities.
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TCS BaNCS / insights
Overview
With a GDP larger than China and Japan combined and daily trade volumes of more than 5 BN, the United States has been and will continue to be the most critical financial market in the world, both from the participant side and the market infrastructure. A bull or a bear rally on the Dow Jones Industrial Average triggers immediate reactions at the Nikkei, Hang Sang, Sensex, and FTSE.
The US capital markets lead the world in size, influence, and liquidity, with US equities representing over 38.5% of the global market cap, a far larger share than any other region.
However, it is also important to call out a few counter-intuitive aspects of this market.
- It was only in July of 2023 that the US moved to instant payments; in contrast, India boasts 89 BN instant payment transactions.
- The US stock market continues to be on a T+2 settlement cycle while the emerging economies have accomplished T+1.
- The US banking system still relies on memo posts, while the rest of the world is real-time.
The biggest challenge toward the modernization journey that the financial services sector in the US faces is the sheer volume of transactions and the billions of lines of code that have grown on legacy technology over the decades. This brings us to the critical responsibility of carrying the financial services industry into the digital era. Financial technology providers have to provide digital technology and risk-mitigated mechanisms to migrate data from the old to the new without breaking the plumbing.
For over 25 years, TCS has had a powerful presence in North America, addressing the critical needs of the US financial services industry. In doing so, we introduced pathbreaking concepts into the core technology used by top US financial institutions, and the network effect compelled other top players to either adopt TCS BaNCSTM or develop similar technologies.
TCS BaNCS started as a modern, future-ready solution providing real-time, event-driven, multicurrency, multi-lingual, multi-market capabilities. Our capabilities were unmatched in the industry when TCS BaNCS entered the US market, and those capabilities remain unmatched today.
Just over twenty years ago, we became the fintech partner for a top custodian and a top fund manager – each a household name and American icon. In these initial engagements, we automated corporate actions processing, which involves multiple handshakes from external data providers, processors and analysts within the bank, and electors from customer organizations. Through our efforts, we implemented necessary controls to protect the banks and their customers from significant financial risks.
Since then, TCS BaNCS has never looked back. TCS BaNCS in North America expanded horizontally by acquiring a dominant market share for our core asset servicing offering in corporate actions and custody and vertically by moving up the value chain with wealth management and private banking solutions.
Today, the TCS BaNCS solution services the top 3 of the 4 US banks and a top 3 asset manager. TCS BaNCS holds the unmatched distinction of servicing the corporate actions processing needs for all segments of the securities industry – asset managers, brokers/ dealers, and custodians. We are the preferred choice of top US banks across a full range of asset servicing solutions.
TCS BaNCS customers benefit from the highest levels of service quality and the highest STP rates. With TCS BaNCS for Corporate Actions, we have significantly reduced settlement failure, ensuring receipt of monies or securities from counterparties into customer accounts in the shortest possible time. High levels of STP also mean lower levels of manual intervention and the reduced incidence of human errors and their resulting financial losses. As part of automating operational processes, TCS BaNCS also has enabled customer self-service so that end customers can take control of their financial lives by managing their own transactions while ensuring non-repudiation and reducing errors for our financial institution clients.
Not only have the real-time and STP capabilities of TCS BaNCS improved operational efficiencies and reduced risk, but TCS BaNCS has also delivered a competitive advantage for banks facing the daunting challenge of accelerated settlement cycles. For example, when SEC and DTCC initiatives moved the industry from T+3 to T+2 in 2017, TCS BaNCS customers handled the transition seamlessly over a single weekend. The DTCC-led T+1 transition is planned for May 2024, and TCS BaNCS customers will be prepared for an equally fast changeover.
North American securities market strategy
Our overall strategy for the North American securities market focuses on four areas below.
1. Democratizing financial wellness
With the rise of the retail investor, financial institutions must evolve quickly to meet new demands. Until recent decades, banking and securities were completely walled off from one another by US regulators. The result was that separate core solutions evolved to support different segments of the US financial services marketplace. Today, the regulatory barriers between securities and banking are far more porous, enabling a new range of possibilities.
With its origins in the Swiss private banking market, TCS BaNCS has always supported cash and security products with the same solution. Our approach brings banking and investments together onto a common core solution, enabling a comprehensive, real-time, 360-degree assessment of customer assets and liabilities, including cash and securities. The common core of TCS BaNCS has become a significant differentiator in today’s marketplace.
These capabilities have always been essential for the most complicated family trusts. Today, they are becoming increasingly valuable to support a broader range of personal wealth offerings across the entire spectrum of savers and investors. We have also added support for digital assets, including a full range of crypto-assets, tokenized securities, and other innovative financial products.
Our most ground-breaking work has been supporting traditional assets for the mass market. One of our clients, a fund manager servicing over 30 million US families, fused the power of human advice with the power of algorithms to create a low-cost, highly scalable financial advice platform.
The result was a highly lauded, human-powered, robo-advisory service that delivers affordable advice to investors. We are also working with a major global bank on a platform that we believe will be the most competitive, cutting-edge financial advisory solution ever launched in the US market. Using TCS BaNCS, our customer intends to bring to Main Street consumers a level of high-quality, high-end financial advice that had once been the realm of only the wealthiest investors. With initiatives such as these, we are proud to democratize access to financial wellbeing and promote equity.
In addition, our technology platform enables new entrants to leapfrog the incumbents with real-time solutions and T+1 readiness. For example, a top European bank was the first customer of the real-time TCS BaNCS solution for US Custody and Settlement.
2. Business-class technology
The smoothest and simplest user experiences are typically found in the front office and client-facing systems designed for individuals and retail customers. With TCS BaNCS, financial institutions can create superior user experiences from front to back, anywhere in the organization.
A top US bank sought to deliver best-in-class user experiences and SLAs to its institutional customer base, including the middle and back-office operations teams servicing customers. Following two years of due diligence, TCS BaNCS was selected for this initiative just at the onset of the pandemic. Using TCS’ Secured Borderless WorkspacesTM (SBWSTM), an industry-leading framework for remote work, TCS forged an excellent partnership with the bank to deliver an asset servicing offering that reduced manual interventions by 80% and achieved an STP rate in three 9s and above, leading to a significant positive impact in end-customer SLAs and a marked improvement in NPS. With this effort, the bank is on track to capture a leading market share in the US Brokerage Prime Services segment.
3. Looking beyond borders
In addition to supporting banks based in the US, TCS BaNCS also provides solutions for non-US banks seeking market entry through greenfield initiatives, organic growth, or joint ventures. Given our market knowledge and proven capabilities, we have become the premier choice for financial institutions looking to expand their US presence.
In addition, our technology platform enables new entrants to leapfrog the incumbents with real-time solutions and T+1 readiness. For example, a top European bank was the first customer of the real-time TCS BaNCS solution for US Custody and Settlement. At the time, TCS BaNCS was the only system taking advantage of the ISO messaging-based settlement option offered by DTCC. As a result, not only was the bank ready for T+2 in 2017, but it’s also ready to take on T+1 when it goes live in May 2024.
Today, we have aligned as strategic partners with top European and Asian banks operating in the US market and seeking to supercharge their US businesses. We believe that our partnerships with financial institutions worldwide will improve the competitiveness and efficiency of the financial services marketplace in the US to the ultimate benefit of consumers and businesses everywhere.
4. Powering the cloud journey
TCS BaNCS has become a leader in harnessing the power of the cloud to deliver core solutions in financial technology to US financial institutions. In addition to achieving technical milestones for scalable infrastructure, TCS BaNCS Cloud delivers scalable operations and more robust adherence to best practices, leading to significant risk reduction, unlimited scalability, faster speed-to-market, and an improved customer experience.
Starting in 2018, TCS BaNCS started a major push to migrate the US operations of its top bank customers to the cloud, using a combination of public and private cloud infrastructure. Today, a high proportion of TCS BaNCS customers in the US are being powered by TCS BaNCS Cloud, with solutions in full compliance with US regulations and with the stringent requirements of the State of New York and New York Banking regulations.
Going far past the migration of legacy systems, our customers are now using TCS BaNCS Cloud to fuel innovation. As an example, using TCS BaNCS Cloud, we have established an Asset Servicing Ecosystem for one of the world’s largest custodian banks. The solution provides an intra-bank utility that creates and manages a single “golden copy” of announcements, which is then made available across all its multiple lines of business to ensure homogeneity in processing and outcomes. TCS BaNCS Cloud includes a full range of microservices, APIs, and an expansive partner ecosystem that supports increased collaboration across our customer base.
With our visionary approach to technology solutions, we have consistently embraced change and will continue to do so. The financial services industry in North America is evolving by the day, and we are committed to ensuring that our customers are ready for constant change.
We believe that our strategy for the US securities marketplace anticipates the largest and most important changes to come. We have already delivered solutions that fulfil the promise of cutting-edge technology for the capital markets, and we are committed to fulfilling the visions of our customers.
With the globally proven delivery prowess of our parent, TCS, and our unmatched capabilities in the North American securities market, we intend to be the preferred provider to banks around the world doing business here in the US, the world’s leading securities marketplace.
