Turning round a programme to transform and simplify general lending performance for a European wholesale bank

The Problem

Our client is a successful universal bank with commercial and corporate lending operations in many European countries. This was not a failing business, but the ambition to do better was clear. The growth in the bank had led to the proliferation of multiple variations of products and services – too many for the likely differences in proposition and regulatory/reporting needs in each territory. Improving service, thus, had become slow and cumbersome. In turn, this meant that Cost/Income ratio looked ripe for improvement.

The executive team member who owned the programme to transform these circumstances had become concerned that the initiative had lost its way; stakeholders across the bank had begun to question the case for change, what the improvements would do and how the change would be managed. Even though a large, global consulting firm had been engaged for some time, our client had a gut feeling that things were not ‘right’.

The Solution

Our first step was to meet the programme team and ask some simple but fundamental questions: when all this is finished, how will it look and how will the bank really work? Does everyone understand that? How will you make the change, where will you start?
When it became clear that the answers to these questions were not all clear, our brief became self-evident: define the design and architecture of exactly how client, operations, product, risk and IT functions will operate in the new world; engage the stakeholders in this process of discovery; build the plan that will make the changes happen, step by step. Our key activities were to:

  • Develop a Target Business Model or ‘Blueprint’ which painted a picture of how the business would work once all changes had been introduced, not just what the organisational structure might be. We developed and validated the blueprint with key stakeholders in Retail & Wholesale in the Netherlands and Belgium.
  • Develop a Business Case for the changes across Retail & Wholesale, NL & BE and gained approval and commitment from the Executive for the scale of changes and savings.
  • Design a detailed Target Operating Model for SME lending, labelled the Standardised Lending Model. We did this in conjunction with IT to draw on the existing Service Oriented Architecture. We then promoted and sold the concept of this cross border lending model to the business and planned the implementation
  • Restructure the programme to deliver the blueprint with a number of workstreams:

- To standardise SME (‘small ticket’) lending
- To improve non-standardised (‘big-ticket’) lending
- To improve the bank’s front office processes drawing on LEAN
- To standardise products cross border.

Client’s Benefits

Stakeholders’ concern and rejection of the change were turned around. We got the programme back on track, with a clear mission and mandate, established a combined client-consultant programme team to start implementation, and handed over to an all-client team to complete the job. The lending business is now simplified, with a benchmark Cost/Income ratio and clear positioning in its markets.

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