Aspect Advisory

Reducing Cost Inefficiencies in Transactional Products and Services (TPS) Division - Outward Telematic Transfers (OTT)

Overview

Overview

Aspect Advisory partnered with the Transactional Products and Services (TPS) division of a leading banking group to conduct a Proof of Concept (PoC) initiative focused on reducing cost inefficiencies associated with Outward Telematic Transfers (OTT).

OTT services play a critical role in facilitating international payments and cross-border transactions, yet inefficiencies in cost structures and operational workflows often lead to higher processing costs, reduced margins, and suboptimal pricing strategies. The objective of this initiative was to identify cost leakages, optimise the transactional process, and implement a sustainable cost-efficient framework for the bank’s OTT services. 

Solution

Solution

Aspect Advisory adopted a data-driven and analytical approach to identify inefficiencies and drive cost optimisation. The engagement was structured into three key phases:

1.Quantification of Costs & Identifying Inefficiencies

  • Conducted a comprehensive cost assessment to quantify expenses related to processing, compliance, and settlement of OTT transactions.
  • Mapped out the product life cycle to identify inefficiencies, redundancies, and areas of excessive cost accumulation.
  • Analysed cost drivers such as interbank fees, regulatory charges, operational overheads, and FX margins.

 

2. Strategic Recommendations for Cost Optimisation

  • Developed an optimised pricing model to ensure cost recovery while maintaining competitive rates for customers.
  • Proposed process automation and workflow enhancements to reduce manual intervention and minimise processing errors.
  • Recommended alternative routing mechanisms to leverage cost-effective correspondent banking relationships.
  • Advised on the use of digital payment channels to streamline operations and reduce dependency on high-cost legacy systems.

 

3. Implementation & Cost Optimisation Roll-Out Plan

  • Designed a phased implementation roadmap for rolling out cost-efficient measures.
  • Provided a structured framework for continuous monitoring and refinement of transactional cost structures.
  • Ensured alignment with regulatory compliance requirements and risk management protocols. 

Results & Impact

Results & Impact

The initiative led to significant improvements in cost efficiency and pricing sustainability, directly impacting the bank’s profitability and service competitiveness.

  • Optimised Loan-Level Profitability Pricing – Ensured the correct allocation of costs at a per-transaction level, leading to improved pricing models.
  • Reduced Processing & Transaction Costs – Identified and eliminated unnecessary expenses in the OTT process, leading to cost savings.
  • Enhanced Operational Efficiency – Improved transaction workflows, reducing manual processing time and error rates.
  • Strengthened Competitive Positioning – Enabled the bank to offer cost-effective cross-border payment solutions to its customers. 

Strategic Themes Addressed

Strategic Themes Addressed

  • Cost Efficiency & Profitability Optimisation – Streamlining transactional processes to improve margins.
  • Process Optimisation & Automation – Enhancing operational efficiency through workflow improvements.
  • Sustainable Pricing Strategy – Implementing a long-term, cost-conscious pricing framework. 

Key Skill Sets Utilised

Key Skill Sets Utilised

  • Financial Analysis – Deep dive into cost structures to quantify inefficiencies.
  • Process Optimisation – Enhancing operational workflows to eliminate bottlenecks.
  • Data-Driven Decision Making – Leveraging analytics for strategic cost reduction.
  • Transactional Banking Expertise – Navigating cross-border payments and regulatory requirements.

Business Areas Impacted

Business Areas Impacted

  • Transactional Products & Services (TPS) – Strengthening cost structures and pricing models.
  • Banking Operations & International Transfers – Optimising cross-border payment mechanisms.
  • Risk & Compliance – Ensuring alignment with regulatory cost structures. 

Insights: Key Learnings & Industry Implications

Insights: Key Learnings & Industry Implications

1. The Growing Need for Cost-Efficient Cross-Border Payment Solutions

With increasing regulatory costs and competition in international payments, banks must continuously optimise their transaction processing models to maintain profitability while offering competitive rates.

2. The Impact of Automation in Transactional Banking

Banks leveraging automation and AI-driven workflows in transactional banking can significantly reduce processing costs, improve turnaround times, and enhance operational accuracy.

3. Future Trends in International Payments & Cost Management

  • Fintech Collaboration – Partnering with fintechs to access cost-efficient payment rails.
  • Blockchain & Digital Currencies – Exploring alternative settlement mechanisms to minimise interbank fees.
  • Real-Time Payment Processing – Adopting real-time international payment solutions for faster, more cost-effective transactions. 

Insights: Key Learnings & Industry Implications

Conclusion

Through the PoC initiative, Aspect Advisory successfully helped the TPS division reduce inefficiencies, optimise transactional cost structures, and implement a scalable cost-saving strategy for OTT services in Uganda.

By adopting a data-driven, analytical, and strategic approach, the bank is now positioned to offer cost-effective cross-border payment solutions while maintaining long-term profitability and operational efficiency.