Transcript Transform Your Bank’s Operations Model

SUMMARY OF
BEST PRACTICES
SESSION
MS. AMELITA ESPANOLA
RB BROOKE’S POINT
 Working

in far flung areas
Working as a team =
“construction/structure/strategy” and
“finishing/detail/tactical”
 Local
area development = market creation
 Partnerships
 Challenge
with grassroots communities
now is to balance local area
operations versus complex national
regulations
MR. EUGENIO DEMEGILLO, JR.
PARTNER RURAL BANK, INC.
A
Best Practices Discussion
 Leading Research:
Daniel O’Keefe, Ashish Jain
Booz & Co.
EXECUTIVE SUMMARY :
- No single method can transform
any of a bank’s operations
model.
- Adopted approach depends on
bank’s goal.
- Definitely, every bank’s
approach will differ then.
SUGGESTED
FIVE
(5)
BEST
PRACTICES FOR TRANSFORMING
OPERATIONAL MODEL OF BANKS.
1.
2.
3.
4.
5.
Customer – back process
transformation.
Product and service
simplification.
Aggressive digitization.
Governance and Performance
Management transparency.
Delivery model optimization.
BANKS WITH SUCCESSFUL OPERATIONS
TRANSFORMATION BY ADOPTING BEST
PRACTICES ACHIEVE FOUR BENEFITS.
Enhanced Client
Experience.
 Eliminate client
complaints.
 Improved responsiveness
to customers / clients.
 Streamline process.
Continuous
improvements.
 Defined standard processes.
 Train organization in
process – oriented thinking.
 Instill a culture of
continuous improvement.
Operational and Cost
Efficiency.
 Reduced cost by driving
out variability.
 Create capacity and
scale.
 Provide cost - effective
services.
Risk Mitigation.
 Ensure consistent and
auditable controls.
 Align operating model
to changing regulations.
ATTY. EDWARD GARCIA, JR.
QUEZON CAPITAL RURAL BANK, INC.
 Focus
on Governance at the Board level
 Foundation of effective governance:
Mutual trust
 Respect
 Openness to ideas and discussion
 Consensus decisions

 Critical,
but respectful = good, effective
relations
 These stand despite generational differences

Ex. Actual board meetings, build-up bank to
attract next generation
END
NOTES BY LEAD RESEARCHERS:
The 5 suggested Best Practices, combined
with aligning the Operational performance
goals to business priorities will:
a.
Enhance operations capabilities,
and
a.
Meet transformation objectives.
MOREOVER, YOUR DECISION ON WHAT PRIMARY
BANKING BUSINESS OBJECTIVE YOU WANT WILL
DETERMINE WHAT APPROACH YOU WILL USE.
Examples of business objectives and/or purposes:
1.
Drive efficiency and reduce/ increase volume.
2.
Simplify and standardize operations.
3.
Improve customer experiences and customer
relations.
So question, what exactly
do you want to do?
RESEARCHES SHOW THAT THE 5 BEST PRACTICES
ARE COMMON ACROSS ALL INITIATIVES THAT LED TO
SUCCESSFUL TRANSFORMATION OF OPERATIONS:
1.
Customer – back Process
Transformation.
Actions:
1.1. Redesign end-to-end process based on desired
client experience.
1.2. Analyze trade – offs between level of
customization and the value perceived by the
client.
1.3. Use a structured, consistent methodology to
drive change.
2. PRODUCT AND SERVICE
SIMPLIFICATION:
Actions:
2.1. Minimize customization where the client sees
no value.
2.2. Align cost-versus-complexity trade – offs with
the strategic direction of the bank/ business.
2.3. Standardize processes and supporting
platforms to drive digitization of client
experience.
3. AGGRESSIVE DIGITIZATION.
Actions:
3.1. Use digital media to create better front-end
client inter – actions. (paperless statements,
tablet interfaces, etc.)
3.2. Implement straight – through processing to
avoid manual processing.
3.3. Form partnership with positioned and nontraditional service providers to build and deploy
digital capabilities.
4. GOVERNANCE AND PERFORMANCE
MANAGEMENT TRANSPARENCY/IES.
Actions:
4.1. Establish and reinforce clear accountabilities, decision rights, and stakeholder roles.
4.2. Define goals and incentives that are clearly
aligned with strategic objectives.
4.3. Adhere to a metrics – driven culture with
key performance indicators (KPI), unit cost
management, etc.
5. DELIVERY MODEL OPTIMIZATION.
Actions:
5.1. Move to shared – services or utility models to
maximize scale and reduce costs within banks.
5.2. Integrate and align process – centric IT operational
capabilities.
5.3. Increase integration of 3rd – party providers into the
delivery model to add variation to cost and to build
capabilities.