Seamless Merger and Integration of CIBC with Merrill Lynch Canada Successfully Achieved Without Business or Client Disruption
The merger of retail brokerage and asset management operations of Merrill Lynch Canada and CIBC (Canadian Imperial Bank of Commerce) needed to be accomplished under tight timelines. Capgemini provided consulting services, established and ran the Project Management Office and supported the integration of technology platforms, processes and operations at both companies.
Capgemini provided consulting services at the outset, established and ran the Project Management Office and supported the integration of technology platforms, processes and operations at both companies.
The result is the successful merger of very different platforms and processes into a single entity. This was achieved without disruption to business operations.
Client Profile
The Canadian Imperial Bank of Commerce (CIBC) is a leading North American financial institution with more than 8 million retail banking and some 8,000 corporate and investment banking customers.
CIBC comprises three strategic business units: CIBC Retail Markets, CIBC Wealth Management and CIBC World Markets.
Annual revenue exceeds CDN$11 billion. The wealth management unit representing over 20% of total revenue provides full-service and discount retail brokerage, mutual fund and GIC (Guaranteed Investment Certificates) services to clients. The unit also provides global private banking and trust, credit and investment management services.
Business Issues
With Canadian household ‘investable’ assets expected to nearly triple over the next decade, one of CIBC’s objectives was to build upon an already successful wealth management practice and grow this area of its business to capitalise on market trends.
In order to achieve this, as well as accelerate CIBC’s growth objectives and continue to provide clients with expert investment advice and an enhanced product offering, CIBC acquired the retail brokerage and asset management businesses of Merrill Lynch Canada Inc.
The Merrill Lynch Canada retail brokerage business was combined with CIBC Wood Gundy, CIBC’s Canadian full-service brokerage operation to form one of the top private client brokerage businesses in Canada.
The potential of the combined entity was a retail sales force of more than 1,550 Investment Advisors managing more than CDN $85 billion in assets for clients across Canada. The asset management transaction involved the acquisition of Merrill Lynch Investment Managers Canada Inc., manager of 41 Merrill Lynch mutual funds. The acquisition and subsequent integration would advance CIBC’s strategic goal to derive a higher proportion of its overall revenue from retail wealth management operations and accelerate growth objectives.
Solution
Capgemini joined when the deal was announced prior to reaching final agreement.
At the outset, Capgemini provided consulting services to ensure the deal structure and closure, establish and run a Project Management Office (PMO) for the entire project, create initial plans and support each of the 17 integration teams. The effort was managed across three phases.
Phase one dealt with the closure of the deal for the retail brokerage and asset management businesses for both organisations and the initial set-up of the PMO. Capgemini provided 25 people for the PMO and created initial project plans. In just a few weeks, the phase was complete.
The second phase was the actual integration of both companies, including technology, back office, organizational design, as well as policies and procedures. Capgemini continued to run the PMO, providing support to all the teams through the cutover weekends.
The cutover for the last two weeks of the integration alone included 5,000 tasks involving over 500 people. This represented a subset of about 12,000 tasks that were managed by the PMO over seven months. System conversion included 35 data conversions, 20 new interfaces, over 800,000 account conversions, 15 system builds, more than 10,000 project plan activities and successful reconciliation of all cash balances and securities.
The final phase included clean-up activities and the final integration projects. The approach throughout the entire project was one of partnership. CIBC and Capgemini employees worked seamlessly as an integrated team in the CIBC environment. This was a contributing factor to the overall success of the project.
Benefits
The successful merger and integration resulted in the amalgamation of very different legacy technology platforms and processes into one common infrastructure, with the move to the new platforms accomplished over a single weekend.
In addition, the full integration of both companies was accomplished with all systems and branches operational on the first business day following the conversion.
Throughout the project, the joint team was able to minimise disruption to clients, retain key staff and maintain service while migrating to a common infrastructure. The consolidation of staff, systems and processes are achieving efficiency targets.
As a result, Capgemini and CIBC met all goals of client and employee retention, establishing a platform for growth, maintaining service level standards throughout, developing a new business and operating model and achieving efficiency targets on unit costs.
Written in co-operation with the Canadian Imperial Bank of Commerce.