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Commissioned Study Conducted by Independent Research Firm Discovers ROI of 227% for Bank Using Calypso

Calypso Technology Inc, a global application software provider of an integrated trading application suite to the capital markets industry, today announced the findings of a commissioned study conducted by Forrester Consulting titled, “The Total Economic ImpactTM of Calypso Trading and Risk Management Platform.” Forrester performed a detailed cost/benefit analysis of the implementation and use of Calypso’s solutions over a five-year period. The subject of the study, one of the largest bank holding companies in the U.S. with assets over $800 billion, experienced financial benefits with a total return on investment (ROI) of 227%.

The bank profiled in the study is using the Calypso system across a number of business areas in the firm. Specifically, the study focused on the implementation of Calypso’s back office platform for a wide range of instruments including commodities, interest rate and balance sheet derivatives (e.g. interest rate swaps), with development underway to include structured credit and equity derivatives in a central derivatives back office environment.

Among other benefits documented in the study, the bank was able to consolidate formerly separate back office processing and technical teams, and in turn, experience considerable cost savings. Furthermore, efficiency and a high level of STP were noted as some of the key achievements. Examples include rule-based automated reconciliation of the accounting and other data in real-time, and being able to issue client invoices automatically over the web. There are no longer any capacity constraints as the processing is product-agnostic. The solution scales in line with business growth without needing to add headcount or new systems to support the trading of additional products. According to one interviewee, “the more products that we’re putting through this central back office platform, the more consolidated a view we’re able to give to our customers.”

“We’re turning off all the other [back office software] license fees, [reassigning] all of those applications people, turning off hardware costs, maintenance costs, etc,” said a senior vice president of the Corporate Investment Bank Technology Group at the bank. “Those costs just go away.”

The study’s analysis utilized Forrester’s Total Economic Impact (TEI) methodology, which measures costs, benefits, risk and flexibility, along with detailed interviews with the bank’s executives. The benefits outlined by the report include:

- ROI: The risk-adjusted ROI for the bank is 227% with a payback period of 22 months after deployment

- Benefits: Principal benefits to the bank include cost savings in direct labor, technical support, infrastructure, and software license costs made redundant with the deployment of the Calypso platform. Total benefits over the five-year period sum to $17.6 million (risk-adjusted, present value)

Charles Marston, CEO of Calypso, says, “We have always been and continue to be committed to delivering ROI for our clients. The findings of the commissioned study conducted by Forrester Consulting are evidence of this commitment and we look forward to helping financial institutions grow their businesses while still reducing costs and increasing efficiency.”