Good year for IQ`s financial services arm

By Iain Scott for IQ Business Group

Johannesburg, 05 Oct 2001

The IQ Business Group`s financial services arm has reported revenue of R83 million for its first year, which it attributes to bank consolidation and the squeeze for improved costs.

The division says that, managing forecasts and projections, an increase in turnover to about R180 million is expected for the current financial year.

The revenues are within expectations, as the group said at the division`s launch that it expected it to achieve turnover of between R80 million and R100 million in its first year. Initial expectations for the second year were R150 million to R200 million revenue.

Les Horne, the division`s head, attributes the performance to delivery, willingness to share risk, as well as an innovative approach and non-exclusive product alignment.

"Financial institutions right now are being squeezed to improve their cost-efficiencies. Enhancements to their mission-critical processes remain one of the most effective ways to achieve the desired cost to income ratios," he says.

"We have also learnt how to work with large volumes, and have built up the necessary resources, experience and intellectual property in all aspects of financial services so that we are in a position to handle any size project."

The division began as a joint venture between Fedsure Financial Services and The IQ Business Group early last year, with Fedsure` s IT business being outsourced to IQ.

Despite the break up of Fedsure earlier this year and the inclusion of certain aspects of the business into Investec, IQ has retained a significant amount of the initial services.

Specialising in business process solutions, IQ`s financial services arm is strong in the banking and superannuation (employee benefits) sectors, where it has undertaken projects for a number of large financial institutions including Brait, Absa, Investec, Old Mutual Bank, Standard Bank and Nedcor. International clients include CitiStreet and Morgan Stanley.

"A great contributor to the division`s appeal is that we don`t force specific solutions and products on a client, nor do we undermine their operational structure," says Horne. "We also don`t tell clients where they should be, or redesign their business models unnecessarily.

"Rather, we take full cognisance of existing structures and paradigms when working with our clients. As a result of this, IQ is an unthreatening presence to the financial institution concerned," he adds.

"We are willing to share the risk in projects - the client pays only if the solution works. This strategy guarantees companies our commitment to ensuring a steady and ongoing return on their investment."

The division will focus this year on building its intellectual property and growing further in the local financial services market. It also plans to expand its international operations, Horne says.