Written by Kangkan Halder
Caceis Bank’s acquisition and integration of RBC Investor Services in Luxembourg has brought comprehensive services and significant synergies to clients, managing director Philippe Bourgues stated in an interview.
Philippe Bourgues, managing director of Caceis Bank in Luxembourg since 2017, discussed the strategic and operational gains from the integration of RBC Investor Services, which Caceis acquired in 2023. In an interview with Delano, he said that following the integration, Caceis now offers a seamless, unified service experience to all clients.
Kangkan Halder: Could you briefly describe the domains and services offered by Caceis Bank in Luxembourg and the former RBC Investor Services entity in Luxembourg?
Philippe Bourgues: In Luxembourg, both the Caceis and former RBC entity provide a very similar scope of services. We offer services to all types of investment funds managed by asset management firms and institutional clients such as insurance companies. The services cover the funds’ administration, custody and depositary needs along with a host of additional services such as private equity and real estate services, cross-border distribution support, financial market services, regulatory and ESG compliance support. These are all backed up by a comprehensive reporting service to give clients a clear, integrated picture of their activities. The asset servicing industry depends heavily on complex IT platforms and data interfaces to provide robust and accurate services. This is why a major part of the work to combine our two entities in Luxembourg was focused on identifying the best performing technology platforms and consolidating both companies’ activities. Since the acquisition, which involved in-depth studies into cross-company compatibility studies, the two entities ran side by side but with a tight 12-month plan to gradually integrate the IT-side and combine the service offering of the two entities. The highly complex service consolidation project has now been completed and all group clients now have access to the same, unified offering through Luxembourg.
The synergies at group level and at a local Luxembourg level are considerable.
KH: As the managing director in Luxembourg since 2017 and having overseen the acquisition of RBC Investor Services Bank in 2023, could you elaborate on the motivations behind this acquisition and the efficiencies you anticipate?
PB: The Caceis group has always been a company that has been open to growth opportunities from partnerships and acquisitions in addition to organic growth. Indeed, our group was initially founded by a partnership between the asset servicing divisions of two French banking institutions. Since then, we have gained a wealth of expertise in integrating acquired businesses--such as Germany’s HVB, the Netherlands’ Kas Bank--and forming partnerships--such as our merger with Santander’s asset servicing division. Our groups’ most recent acquisition of RBC’s European asset servicing division makes perfect sense across our worldwide network, strengthening the groups’ presence in Luxembourg and Ireland--two key jurisdictions for fund domiciliation and distribution--and in the UK, giving us a stronger platform for business development in the English-speaking markets, and it also brought a fully operational entity in Malaysia to strengthen our follow-the-sun servicing capabilities. The synergies at group level and at a local Luxembourg level are considerable. IT platform consolidation, legal entity mergers and the scale of economies that those bring will enable significant cost savings. We gain new products and services as well as the skilled staff who know how to develop, maintain and promote them. And finally we gain new clients to whom we are making every effort to demonstrate our professionalism and vision for the future to ensure we retain their business and help them grow in today’s dynamic market.
KH: Nearly a year has passed since the acquisition. What have been the main outcomes so far?
PB: A major milestone for our group was to perform the legal entity mergers in countries where the acquisition produced two entities in one country, such as in Luxembourg. This has now been completed across the group. Another milestone, and one that was equally complex was consolidating the Luxembourg staff from both entities under a common employment contract and defining a common corporate culture. This we have also undertaken and we are delighted with the results--everyone working under the same conditions and within what we like to call our ‘One Caceis’ culture of common values shared by all staff in Luxembourg.
We have aligned the benefit packages so now all staff have access to all the key features of Caceis and former RBC staff packages.
KH: Looking ahead, what are the near to medium-term expectations for Caceis?
PB: Recent years have involved a lot of work linked to mergers and partnerships, such as IT consolidation, staff lift-outs, client migrations, etc and now that these two major operations involving Santander and RBC are nearing completion, we will be able to focus on achieving further business synergies, leveraging our new-found service scope to take advantage of cross-selling opportunities among our clientele, and benefitting from our broader geographic reach to win additional business form our existing clients and become an even stronger proposition for prospective clients in the asset servicing marketplace.
KH: Could you tell us more about work and employee consolidation structure?
PB: The employment framework has already been unified, which is a major step, and we are delighted that so many of the former RBC staff in Luxembourg have shown their confidence in our group’s strategy and ambitions by moving into our group. Across our combined Luxembourg staff, we have aligned the benefit packages so now all staff have access to all the key features of Caceis and former RBC staff packages. Separate teams performing the same tasks have been brought together and harmonised after in-depth analyses of the scope of their activities and we have worked hard to make teambuilding a key part of the process. We run regular employee satisfaction surveys and for the first time, RBC employees will be involved, giving us a clearer picture of what is working well and what needs to change.
KH: Caceis has grown from 850 employees in 2023 to over 2,000 in 2024. What are the main challenges and opportunities associated with this significant increase in staff numbers?
PB: It’s true that Caceis is now one of Luxembourg’s biggest employers and having a large number of staff members is a positive point for us, in terms of having access to a vast pool of skills and knowledge but also easing our need to recruit heavily as we pursue our future business development objectives. Our recently combined HR department has the expertise and the platforms and IT tools to enable it to efficiently scale up contract management, salary calculations, staff appraisals and other employee benefits so the scale is no longer a major issue. For my part, I am keen to retain the mentality of a smaller, dynamic group even though we are over 2,000 men and women. I want to ensure we keep innovating, feel like ‘One Caceis’ and that our staff know what our group is doing. We can do this by giving employees more responsibility to act and take decisions in their sphere of competence and by providing regular and clear communication to staff so they understand our strategy and our future objectives.
As of June 2024, we are proud to announce that 37.9% of the banks’ managers are women.
KH: Caceis has two offices in Luxembourg. Do you plan to consolidate staff into a single location?
PB: We have two office locations in Luxembourg--on the Glacis and in Esch-Belval. We recently presented our plan for Caceis in Luxembourg to our staff, explaining which teams would be located where. This was obviously not an easy decision to make and we undertook major studies and staff questionnaires to get the best possible balance between preferences and business efficiencies in order to cause the least disruption possible. The plan for the distribution of the business units and their staff will be fully implemented by September this year but there have already been so many inter-location workshops, teamwork meetings, seminars and events that many are used to moving between the two offices.
KH: In March 2023, Caceis signed the Luxembourg Women in Finance Charter, committing to achieving 36% women in senior management and 45% in middle and junior management by 2025 as a step toward long-term gender parity. Could you provide a current status on this initiative?
PB: Since signing, Caceis has been fully committed to meeting the objectives of the Luxembourg Women in Finance Charter. As of June 2024, we are proud to announce that 37.9% of the banks’ managers are women, which means we are well placed with respect to Luxembourg market practices. Nevertheless, we are determined to further improve this figure over the coming years by running various initiatives that will help our group benefit from the broad pool of talented and experienced women at every level of our company.
KH: Besides focusing on ESG, is Caceis embracing the use of AI and generative AI? What projects are in the pipeline, and what we can expect in coming months and years?
PB: AI comes in many forms, from the simple robotic process automation to all the way to chat bots that help field common client questions. We are currently studying AI and how it can benefit our business and enhance the offer we provide to clients. We do seek to leverage technology to free up staff from repetitive, low value tasks in order to focus their efforts on higher value areas where the human element is essential but are cautious in our approach and wary of exaggerated claims.
Our business is already highly advanced in terms of IT and we are always seeking ways to innovate whether internally or via partnerships with leading technology providers. A key part of our offer is the Caceis Connect Store through which we give clients access to innovative fintech partners’ solutions which are preconfigured to work perfectly with the data in our systems once clients provide the authorisation to do so. Internally, we use machine learning tools such as Pick-AI, which assists with invoice processing by highlighting the key sections of invoices that are received in a multitude of formats. We don’t see current AI as replacing the jobs of our staff members but as with most technology it will enhance the efficiency and capabilities of our staff and therefore help us better service our clients.