Outsource success at bank of Bcotland

Just eighteen months after severing links with Standard Life and launching its own life and pensions operation, Bank of Scotland Investors Club aims to become one of the most profitable bancassurers in the UK.

The Bank is already counting the benefits stemming from its key decision to hand back office administration of the new company to a third party, allowing it to focus fully on core business management and avoiding the drain on resources that setting up an in-house capability would incur.

Graham Horn, Bank of Scotland Investors Club`s operations director, says the resolve to bring in specialists Marlborough Stirling, the UK`s leading independent provider of e-commerce solutions, led to an "exceptional launch" and has provided a powerful and flexible platform on which to build and service an evolving product range.

"Outsourcing was the logical choice, given our desire to continue to concentrate on banking", he says. "We strongly believe that where experts exist in other areas, it makes sense to utilise their skills and their experience.

"Using our 'best of breed` criteria we were impressed with Marlborough Stirling`s proven success in administering similar business and their ability to fit in with our extremely tight timescales. They have proved the ideal partner to give us an efficient, reliable service developed at low risk and low-cost."

The Bank is hopeful that ongoing developments with Marlborough Stirling will ultimately mean a further reduction in outlay, which in turn will help it achieve its "most profitable" aim.

Bank of Scotland Investors Club launched with term assurance products, an OEIC and ISAs, but within six months had introduced a capital investment bond, individual and group personal pensions, pension term assurance and critical illness cover. More recently a guaranteed income bond, a secure stockmarket bond and an over-50s life product have been added to the range.

The company now has 14,000 customers, and the system is currently being adapted to allow new applications to be handled on the internet as well as ultimately enabling clients to electronically inspect and enquire about their plans.

Marlborough Stirling`s general manager for third party service implementation, John Berry, says: "Outsourcing can rapidly deliver big benefits for a life and pension start-up. Our system has the flexibility and capacity to cope with the Bank of Scotland Investors Club`s demands in getting new products to the market as quickly as possible.

"We are thoroughly enjoying working together and very much look forward to building on the success achieved so far".

Marlborough Stirling tailored their life and pensions administration software and unique Alpha Calculations Engine to suit Bank of Scotland Investors Club`s specific requirements. The strategy was to exploit modern technology that interfaces with point-of-sale software and seamlessly unites front and back offices. The relationship with Marlborough Stirling began with a series of workshops, which the Bank of Scotland says created a clear framework for development and, importantly, a firm basis for the relationship with its outsourcers.

It involved key decision-makers and implementers, who nailed down service requirements and operational standards along with specific issues that would need to be addressed.

Intensive participation by multiple teams in both organisations, constant dialogue and tight project management ensured smooth and rapid progress, says Horn, resulting in user acceptance testing in December 1998 and corporate trialling - creating as near a 'live` situation as possible - two months later.

"The result", he adds, "is an efficient, reliable service which has been developed at low risk and low cost, and which will help us to meet our long-term targets and business objectives."