Global Financial Services Technology Company

Strategic Business Case and Financial Modelling

The Challenge

To create intuitive commercial pricing and cash flow models supporting a major and complex multi-million pound new business proposal for the provision of banking software and services to the UK’s first digital-only Bank

Being a new start up challenger Bank, with highly speculative customer numbers and transaction volumes the solution deployed needed to be scalable dependent upon growth rates and inherently carried more risk and uncertainty compared to an established Bank.

Ian Hutchinson was engaged to work alongside business and technology specialists to build a financial model capable to running multiple solution scenarios based on the Client’s requirements that continually evolved as they developed their own business plan.

The Solution

A bespoke financial model was created featuring:

  • Clearly defined model inputs, assigned to individuals and supporting evidence.
  • A central calculation ‘engine’ through which all input scenarios were consistently processed.
  • Financial outputs aligned to existing reporting standards and formats to aid understanding.

Model inputs and scenarios were modified until the key financial indicators for the project were achieved and a final optional solution approved by the business.

Due to the size of the deal, internal corporate governance required the UK division to obtain US approval, which required the financial model to report in dual currency and comply with US revenue recognition reporting standards throughout the five year project timeline.

The Results

The new business proposal and underlying financial model achieved the target return on investment (ROI) and other key corporate decision criteria obtaining approval from the US parent company to proceed with the bid

After assessing the proposal, the Client awarded the contract to build, deploy and run the banking software for five years.

The bid financial model was then further modified to produce consistent internal reports to inform ongoing business planning and forecasting by group finance and set delivery targets or budgets for the implementation team.

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