BANQUE DE LUXEMBOURG EXPANDS THE REACH OF ITS STRUCTURED PRODUCTS BUSINESS WITH LEXIFI APROPOS
With a central system in place, based on LexiFi Apropos, the Bank intensified pre and after-sale service and simplified daily activities through extensive automation.
In January 2011, Banque de Luxembourg and LexiFi teamed up to strengthen the Bank’s structured products business. Presented with the opportunity to expand its advisory role and distribution reach, the Bank decided to implement new processes and tools for creating and managing structured investment solutions.
"LexiFi more than delivered on its promise: LexiFi Apropos is a very well-designed system that continues to positively surprise us as we encounter new business challenges. LexiFi’s staff is competent and has a sincere desire to make the relationship succeed." Pierre Stoll, Head of Fixed Income and Structured Products at Banque de Luxembourg
The goal was to develop consistent valuation, analysis, and processing capabilities in order to handle an increasingly diverse product portfolio, diversity being measured both in terms of payoff structure and type or combination of underlying assets. The adoption of LexiFi helped fufill this goal through many aspects:
Getting the data together: a new central database for structured products was created. It allows both the advisory desk and the risk management staff to access complete product definitions, comprising economic terms and conditions as well as additional data elements used to support internal processes and client communication.
Offering tailored solutions as opposed to campaign products: LexiFi Apropos’ structuring tools enable users to clearly communicate potential risks and rewards to clients. The system’s document production feature facilitates the creation and distribution of informative term sheets. In addition, users rely on the system’s accurate pricing tools to control and possibly challenge quotes provided by investment banks.
Building long-term client relationships: the Bank tracks the performance of products and underlying assets; verifies that counterparty prices match internally calculated prices; and monitors life cycle events. The software’s interactive reporting tool allows the to set alerts when salient conditions are met. The Bank communicates relevant information to clients through LexiFi’s dynamic product reports listing all events that have affected the product, and describing the current potentially adjusted (e.g., after an equity corporate action) economic terms of the contract.
Pricing and managing risk independently: Banque de Luxembourg quotes secondary market prices directly to clients. In most cases, investment banks are not solicited in this process. LexiFi’s solution is used for independent pricing and risk management as the Bank maintains and hedges a product inventory to enable secondary market purchases by customers.
Streamlining operations: Banque de Luxembourg has automated the management of contract events, the ongoing valuation of products, and the production of reports and customer documents. The combined use of automated event processing and pricing capabilities has drastically simplified the daily activities of the advisory desk. LexiFi Apropos considerably reduced the number of manual tasks and brought consistency and speed by automating the production and distribution of up-to-date term sheets and product reports.
Name: Banque de Luxembourg
Industry: private banking
AUM: EUR 69,323 M as of December 2018
ABOUT BANQUE DE LUXEMBOURG
Founded in 1920, Banque de Luxembourg is one of the most important financial institutions in Luxembourg. With decisions made locally, it offers its independent wealth management expertise to clients based in Luxembourg and the rest of Europe.
Banque de Luxembourg is a subsidiary of Crédit Mutuel-CIC Group, a major European financial services firm with 65,000 employees providing banking and insurance services to 18.7 million customers. Crédit Mutuel-CIC Group is the second largest retail bank in France