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ABOUT CUSTOMER: Luminor is the third-largest provider of financial services in the Baltics, with approximately 1 million clients, 2500 employees, and a market share of 16.6% in deposits and 18.7% in lending. Luminor’s holding company is the Blackstone Group Inc. - an American multinational private equity, alternative asset management, and financial services firm based in New York City.



Activity-Based Costing (ABC) Implementation Project was driven by these main business needs:

  • Deliver high quality ROE through precise pricing and profitability among other factors.

  • Excel in customer experience while building profitable customer relationship.

  • Focus on operational excellence.

  • Become data and knowledge-driven.


Addendum provided expertise in the following areas:


  • Impact analysis;

  • Gathering detailed and prioritized project requirements;

  • Visualization of process flow;

  • Ensuring proper project documentation;

  • Driving communication between business and IT;

  • Project risk management;

  • Test management;

  • New service on-boarding in the bank infrastructure: 

  • Software description and technical documentation;

  • Dependencies with internal systems (impact);

  • Operational and Maintenance Guide;

  • Service level requirements document (Capacity Management, Disaster Recovery, Business Continuity, KPI, Operational risks);

  •  Service Support Model;

  • Operational tasks (Back-up policies, data retention);

  • Knowledge transfer.


  •  Project closure.


  • Analysis and design phase:  defining business needs and documenting functional and non-functional requirements; consulting in solution architecture and interfaces; data mapping alignment.

  • Testing phase: testing strategy preparation, writing test cases; testing data gathering and preparation, support in user acceptance testing.

  • Project delivery phase: working with the project delivery team to plan upcoming activities, define goals and metrics; monitoring and reporting progress on defined metrics; the escalation of risks, or issues.

  • Project closure activities: working closely with users during roll-out to transfer knowledge; documentation of system configuration and execution of configuration activities; executing data quality checks.


Implemented a unified platform for all cost calculations in Luminor Group. Implemented Activity-Based Costing software covers the following functional areas: 

  • Owning a multidimensional cost data set supports decision making, incl. decisions about the closure of non-performing products, selection of the sales channel, changes, and alignment of service models.
    It is a crucial input to pricing, enabling the company to set up prices in accordance with its strategy and initial cost coverage.

  • Possibility to identify the profitability of the company’s customers, adequately assess discount rates while keeping proper profitability level.

  • The availability of the cost data on all dimensions is one of the prerequisites for efficient profitability management and follow up.

  • ABC supports optimization in both: internal processes and service models towards the customers.

  • The tool also provides a good base for countries benchmarking in terms of internal processes and relevant.

Defined common ABC methodology across all Luminor Group, where system users can: 

  • Perform deep dives on costs data with the option to trace back all allocated costs to the origin;

  • Get input to pricing, re-pricing, and other business decisions;

  • Get accurate input to product, customer and segment profitability calculations;

  • Model cost allocations and simulations.

Ensure cost analyses and benchmark between countries' performance.

Possibility to perform Transfer Pricing calculations according to the OECD and local Tax legislation.

Improve Cost Traceability either on products, segments, customers, dimensions, either by detailed components and processes, enabling further efficiency and service model optimization.

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