Why digitisation is a lifelong commitment for Saxo Bank

Saxo Bank’s journey to becoming a global digital investment and trading bank has strong elements of the Midas touch.

Today, the bank runs on a global, multi-asset, multi-tenanted tech stack with one set of global business processes. Over time, its platform has evolved, providing modern digital solutions via mobile, desktop and web technologies, while also digitising the entire value chain from onboarding, trade execution and custody to managing assets and providing client service.

But it has not always been this way.

From starting life as brokerage Midas Fondsmaeglerselskab in 1992, the bank – true to its original name – has expanded rapidly both organically and through mergers and acquisitions to become a multi-asset facilitator servicing traders, investors and institutional clients worldwide.

Its ‘Midas touch’ growth is reflected in the fact it now has offices in 14 countries, including major financial centres such as London, Paris, Zurich, Dubai, Singapore, India and Tokyo, and more than one million clients globally. It services them with a full range of investment products and services including stocks, bonds and Exchange Traded Funds (ETFs) as well as leveraged products, such as forex, commodities, futures and options.

Just as the world has evolved digitally over the last 30 years, so too has Saxo Bank, says CFO Mads Dorf Petersen, who himself has experienced a Midas touch journey at the bank, where he started as director and head of business planning and analysis in 2009.

Digitising finance is crucial

Dorf Petersen points out that the bank’s finance function is no exception to the rule when it comes to reliance on digital solutions.

Today, digitisation provides the finance team with the volume and scale, as well as the accuracy and detail, it needs when accounting for many millions of cash flows – fees, interest payments, commissions, trades, and corporate actions – emanating from client activity.

“As well as the volume that must be processed, we have only a couple of hours between the US markets closing and the Australian markets opening to process the accounting details – so we need highly scalable, accounting engines that support the volume and scale required,” he says.

“Our ambition is to process millions of lines of data and prepare the information required by finance so that it is ready and available at the start of every day. This requires us to rely on advanced data warehousing and processing engines that provide the data measures and reconciliations – at scale, thereby minimising the need for repetitive manual preparation that does not add value.

Once Saxo’s finance team have processed the data, it relies on world-class business intelligence expertise and analytics to provide near real-time feedback on every aspect of the value chain – from how leads are converted on the website to the profitability of our clients, and the impact of marketing campaigns.

Dorf Petersen firmly believes that Saxo Bank would not be able to operate as it does without an ongoing focus on digitisation.  “By having reliable and automated operational processes, we aim to ensure the client experience is as good as it can be. It is also important to be able to operate at scale in a cost-effective way. Saxo Bank can only provide access to all types of clients at a competitive cost if we have a relentless focus on automation.

He adds that digitisation has also played a key role in helping the bank meet ever-growing reporting requirements worldwide. “To meet the requirements of local regulators, we must have scalable and automated regulatory reporting solutions. The pace of regulatory change is significant, and we need to reflect changes accurately and quickly – digitalisation of the reporting process enables this,” he says.

A big CFO role

Dorf Petersen believes his role as CFO is critical in both driving Saxo Bank’s digitalisation agenda and, importantly, ensuring that the digital platform it relies on is delivering to clients and shareholders alike.

He identifies three key responsibilities, which have benefitted significantly from the bank’s investment in automation and digital solutions: meeting statutory and regulatory obligations in multiple jurisdictions; delivering products at the right price while ensuring growth and profitability; and providing the commercial insights, data and planning needed when partnering with the rest of the organisation.

“These key responsibilities can only be properly carried out with the right level of investment in technology, people, and process that is the foundation of a digital platform,” he says. “Digitisation and maintaining a digital platform require considerable capital investment – but, on the other side of the equation, a digital platform should result in cost efficiencies and increased revenues as commercial objectives are met.

“Ensuring that the right capital investment is prioritised to optimise revenue growth and cost reduction through digitalisation is a complex challenge – but it is one which the CFO and their team can facilitate and have the difficult discussions sometimes needed.”

Dorf Petersen points out that even when a digital platform is the DNA of the organisation, there is always a need to renew and evolve it – and this requires careful consideration and management.

“Digitalisation and automation should provide the solution to the question: ‘what is the outcome we require?’ Investment in the platform, people and processes requires precious resources and it needs to be prioritised. The first challenge is ensuring that the investment in solutions is happening in the right area and always with a client-focused mindset,” he says.

“Once the priority is decided, any evolution in the process and platform required must be done while ensuring that it is managed across the whole value chain. Many good technology solutions have failed because of no understanding of the business problem, the commercial opportunity, or because they are rolled out in the wrong way.”

He adds that in 2021, Saxo Bank integrated its technology function and their experts into its different business areas to ensure a digital approach across the whole value chain – and also that its technology expertise was not just the preserve of the tech function.

“This evolution continues to make sure that everyone is aligned in the client funnel to ensure we are delivering the right products in the right way to the right clients,” he says.

Finding the right tools

Dorf Petersen believes that a company and its CFO can only be confident that the right digital tools are deployed ‘by ensuring that everyone is working together.’  “Even the right tool, if badly implemented and without sufficient collaboration and communication, will be the wrong solution,” he says.

He adds that Saxo Bank has product and architectural experts whose responsibility it is to work across the value chain to identify the right tools. This involves working internally and externally to gather requirements, references, and the data required to make the right decision.

“It is also important to understand whether you should build the tool specific to the needs of the bank or whether it is better to buy a tool that has already been developed. Indeed, a good solution may be a hybrid of internally developed components and external solutions,” he says. “A good example here is in regulatory reporting. We invest a great deal of effort, money, and expertise in ensuring that we have robust, accurate, and timely delivery of data in our data-marts. At the same time, we also invest in already developed solutions to process this data, format it, and deliver it to clients and other stakeholders.

“We can never be complacent about the tools we have. What was right for a previous time may no longer be right for now – so we must continually review and measure how effective and efficient our solutions are, and investing where it makes sense to evolve them.”

With digital solutions being so integral to Saxo Bank, it has developed both the knowledge and skills needed in many areas to drive the solutions needed. This expertise is shared among product owners and subject matter experts in different business areas as well as those employees proficient in the technology components used.

“Of course, we also rely on providers of cloud services, infrastructure, and business applications. There we also strive to build win-win relationships – leveraging the expertise of our providers and vendors to ensure we get maximum value in implementation,” concludes Dorf Petersen.

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