By Jorge Mikan, Sales Consultant, TCS Financial Solutions
Read how TCS BaNCS helped CorpBanca Investment Trust prepare for rapid expansion as a custodian to the high-growth Colombian capital markets.
In 2011, Banco CorpBanca Chile acquired the operations of Banco Santander Colombia. The Bogotá-based subsidiary was then rebranded as Banco CorpBanca Colombia in August 2012. The acquired businesses consisted of a stock brokerage, an insurance agency and a trust company: CorpBanca Investment Trust.
CorpBanca Investment Trust (C-TRUST) previously relied upon an IT platform developed by Banco Santander, but those systems were not part of the acquisition and could only be used until June 2016 at the very latest. The extreme upward pressure to deliver a new solution was accelerated by the passage of a Colombia custody law that took effect in 2013. The new law required local mutual funds to appoint a local custodian from among the trust companies regulated by Colombia’s financial services regulator, the Superintendencia Financiera de Colombia (SFC).
The custody law had two main effects: First, it spurred a rush of new clients to CTRUST, making CorpBanca the second-largest custodian in the Colombian market – even while still using legacy systems. Since 2012, C-TRUST has increased assets under custody fivefold.
Second, the new law made the search for an updated custody solution increasingly urgent. C-TRUST needed to establish direct connections with its domestic customers, and it would not have been practical to add functionality to the legacy Banco Santander system given the sunset date of 2016. With strong domestic rivals, CTRUST faced the challenge of keeping its customers completely satisfied while also building a competitive offering for new customers. These factors made very strong arguments for reinvestment into the custody business.
The search for a solution started with the firm’s rebranding as CTRUST in August 2012. CorpBanca’s internal selection committee reviewed vendors from Colombia and abroad, and also evaluated the possibility of developing the IT platform in-house. The extensive search process was completed in late 2013 with the selection of Tata Consultancy Services. “TCS was already a provider for most of our clients, including the most important of our clients, and they all gave us good reports on the TCS BaNCS platform,” said Susana Montero-Pinilla, Head Manager at C-TRUST. “Every year, TCS launches more and more useful features for the custody business,” Montero-Pinilla added. “We needed to see that level of commitment to continuous improvement.”
Another important selection criterion was the easy-to-use web channel of TCS BaNCS that provides custody clients with transactional access to accounts through multiple connection methods. After evaluating the alternatives, C-TRUST decided to deploy TCS BaNCS, including modules for Securities Processing and Corporate Actions.
C-TRUST signed a contract with TCS in January 2014 – a 7 month project – and in February commenced implementation with the aid of Ernst & Young’s Latin America Financial Services Advisory (LAFSA) practice as implementation partners.
“We have experience working with offshore companies, but this was the first time we worked with a team from India,” related Montero-Pinilla. “Naturally, we had some concerns about the time zone and the cultural differences, but it turned out to be a great experience for everyone.”
One of the biggest benefits for C-TRUST will be the rapid response to the changes in the Colombian capital markets. “Right now, Colombia is going through many changes, and TCS is willing to adapt to all the changes that we need in order to adapt to the market,” said Montero-Pinilla. “It’s not just providing the same standard of service as before, but evolving as the Colombian market adopts international market standards.”
“We expect to see a bigger market for custody services, and our deployment of TCS BaNCS will make us more competitive in the custody business,” said Montero-Pinilla. “Our initial expectation was to have a platform that supports the entire custody business,” said Felipe Maldonado Arango, custody manager for operations of CITRUST. “TCS BaNCS fully supports those expectations.”