Cost and Profitability Management in Capital Markets

Understand the contribution of each business activity, location and product to costs and revenues

In both asset management and trading, there is a need to track costs and revenues. On the basis of this, investment can be targeted. The most profitable geographies, fund types and asset classes will benefit. The most profitable customers can also be tracked.

It is well known that in many industries, the minority of most profitable customers subsidise the loss making majority. In global financial markets, things are not always this simple. Sometimes, relationships mean that customers are highly profitable in one area, but break even or loss making in another. Investment in new trading centres, asset classes or fund offerings may need a period to become mature.

Regardless, you can make better decisions when the facts about profitability for a given cost driver are clear. Your aim is to achieve this for different audiences such as the board, the traders or fund managers, and the financial control function. This is the objective of all of the SAS cost and profitability management solutions.

How SAS Can Help

SAS^®Financial Management is one of the solutions within the SAS^®Financial Intelligence family, and provides quick start financial reporting and analysis of costs and revenues.

SAS^®Activity-Based Management is another SAS^®Financial Intelligence solution, taking cost analysis a step further.

SAS^®Profitability Management is a variant of Activity-Based Management. It can be used as a simple, initial step towards ABM.

How Cost and Profitability Management Can Help

How Cost and Profitability Management is Different with SAS

SAS invested in cost and profitability analysis in 2002 by acquiring market leader ABC Technologies Inc. Since then, we have completely rebuilt the solution, integrated core SAS functionality, improved speed and scalability, and proved that it works for more than 750 customers:

• Use any activity-based costing methodology, including bottom-up, consumption and time-driven, to best meet the needs of financial markets businesses.
• Build on essential data cleansing, enrichment and integration, with common metadata at every step.
• Go beyond reporting by using cost, revenue and profitability metrics as the basis for forward-looking predictive analytics and optimisation.
• Tailor the solution to reflect the complexity and transaction volumes appropriate for your own area of financial services, whether asset management, proprietary trading, brokerage or another specialisation.