Our Work

This subsidiary of an International Bank was suffering from declining revenues due to migration of shipping and other corporate clients off-shore. The Consumer Banking division was strictly a liability gathering operation. A corporate-wide strategy had been developed and, as part of that strategy, the parent company directed the Bank to build a viable Consumer Business to offset the Corporate decline.

A 30% productivity improvement across Corporate operations allowed for movement of approximately 100 staff to Consumer operations with zero staff additions.

Erosion of Corporate Bank margins was stopped due to cost reductions.

Consumer Bank deposits exploded due to innovative Payroll product.

Branch asset sales and cards in force doubled the already aggressive expansion plans.

Consumer Bank became profitable in year two.

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Separate Corporate and Consumer operations and re-engineer processes.

Launch Consumer suite of products to include loans, ATM, (debit), and credit cards, special payroll services including company onsite ATM’s, and a full suite of liability products.

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The Support division for this major Commercial Bank was tasked with improving quality, timeliness, and efficiency of Corporate Support Operations.

LoBue was asked to conduct a complete Business Process Reengineering program.

• Significant improvement in service delivery and reduction of inquiries by 40%.
• Trade Services turnaround improved from 48 hours to same day.
• Workstations reduced handoffs by an average of 50% across the operations functions.
• Job enrichment improved processor morale and eliminated backlogs.
• A 20% Productivity Improvement across the division was achieved in 15 months.

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LoBue recommendations were focused on obtaining service enhancement and productivity gains.

• Reorganize loan processing into client industry groups and develop loan workstations.
• Reorganize trade services into import and export departments by industry.
• Combine Checking and reconcilement units and organize by client.
• Develop feedback loops for Corporate client Services to operations units.
• Eliminate un-necessary forms, handoffs, and approvals.
• Increase authority levels for workstation personnel.
• Match working hours to transaction arrival and process completion needs.

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Recently acquired card company required complete business process reengineering and design of new facilities to facilitate major expansion.

The culture was extremely inwardly focused with every function a separate silo. There was no collaboration between functions and process improvement was very difficult to achieve.

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Entire business was reconfigured and new facilities were installed according to plan. The new facility had room for expansion of more than 100% increase in transaction activity.

Process design and the benefits of the redesigned facility resulted in a 35% reduction in operating expense and cycle times were reduced by 50%.

The successful program led to the processing facility becoming the central processing facility for all of Europe

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LoBue conducted a review of the entire organization, analyzing all processes, reporting, and service levels.

Key recommendations for action included:

• Design and build an open space operations facilities, planning for the most efficient functional adjacencies and newly designed process.
• Redesign all processes to eliminate unnecessary hand-offs and controls
• Segment customers and create workgroups to service specific customer sets
• Develop capacity and staff plans to allow for 100% transaction growth
• Develop an MIS system to measure all critical business indices and design and implement a management process including weekly senior management review meetings

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A regional Savings & Loan Bank was under regulatory supervision and subject to being taken over by the OTS.  A new CEO was brought on to save the Bank. This NYSE entity was selling for under $3.00 per share.

LoBue Associates was engaged to re-engineer all operations and participate in the turn-around strategy.

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Due to the successful implementation of all recommendations the Bank staged a dramatic comeback in client service and effectiveness. Business volumes increased and significant cost efficiencies added to a profitability surge resulting in resolution of OTS concerns.

An improving trend in new deposit accounts, mortgage volumes, branch sales of alternative investments and client service improvements, coupled with reduction of supervised loans led to a 600% increase in stock value within 24 months.

Soon thereafter the management accepted a buyout from a major bank, giving  shareholders $28.50 per share for their stock, which was trading below $3.00 per share two years prior.

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• Redesign mortgage origination processes to improve turnaround times.
• Restructure processing areas and centralized customer service capabilities.
• Reorganize the appraisal process and establish dispatch capability.
• Right-size the staffing requirements of the banking centers.
• Provide management analysis techniques to measure productivity.
• Restructure and collapse redundant functions throughout the organization.
• Introduce peak-time and part-time staffing mixes.
• Refocus Branches as sales facilities.

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The Client desired to aggressively grow their consumer franchise and, at the same time, improve efficiency throughout the entire organization. The network of branches was traditionally corporate banking focused and the bank was not taking advantage of opportunities in consumer banking.

Client improved tremendously as sales volume in the consumer business ballooned while expenses were reduced. Results included:

• Direct operating expense reduction of 22%
• Development of standalone Consumer Bank with new asset product offerings and credit card offering.
• First year new customer increase of 50% and doubling of risk-based assets in the consumer business.
• Consumer deposits increased 75%

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LoBue conducted a review of the entire bank and identified opportunities for improved efficiency, service improvement and consumer business expansion. Key recommendations for action included:

• Separate corporate and consumer banking and marketing
• Centralize all branch operations
• Create consumer banking call center
• Consolidate consumer banking service offices

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The institution desired to take the first steps towards identifying necessary actions required for privatization. The Bank's efficiency ratio and other measures were out of line with their  peer group and customer service was suffering.

LoBue Group was asked to conduct an assessment to identify the key areas for improving the Bank's operations. The objective of the review was to position the Bank for privatization.

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The prototype for centralization of International back office functions was conducted and the following firsts for the institution were implemented:

• 30% improvement in productivity
• Results oriented MIS implemented with senior management dashboards
• Dramatic improvement in transaction timeliness and quality
• Elimination of serious customer service backlogs
• Development of Job Descriptions and Production standards for all functions

Additionally, based on Institution wide staffing assessments 4,000 FTE were eliminated in the first year, (12.5% reduction).

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LoBue completed a review of the entire organization and conducted a pilot implementation in the Corporate and International division. The recommendations for the bank were:

• Develop a management information system to support a cultural shift in the organization to a results oriented enterprise.
• Separate Consumer, Corporate and Private Banking into lines of business, each with defined goals.
• Centralize, by region, branch back office operations.
• Establish a Credit Card Services call center.
• Implement an Account Officer tracking and support system to improve productivity and sales efforts.

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The bank was experiencing increasing difficulties in providing quality service for clients. They were not able to grow business by enhancing their current product set or provide customers with effective remote banking channels.

It was not clear whether or not the current technology that supported operations was adequate. The cost to run technology was extremely high and they were experiencing a great deal of instability and general maintenance problems on existing systems. The Core Banking System and Branch Automation System utilized 9-year-old technology and the bank felt that there were more advanced banking systems out in the marketplace that they could utilize.

LoBue was asked to assist the bank by reviewing the technology platforms, systems, architecture and infrastructure; recommend specific solutions; and provide a project plan for implementation.

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Bank has an unbiased and objective assessment of their banking systems and solid recommendations and an RFP and project plan for moving forward. After one year of not making any decisions on what to do with their current banking systems, the Bank finally agreed on a direction of modification/enhancement based on the LoBue recommendations. A prioritization methodology was developed, based on rigorous cost/benefit analysis and objective scoring, which assures the limited Bank capital will go to the highest return projects, thereby increasing the bottom line directly. Over 50% of existing IT initiatives were cancelled as low return and off-strategy efforts.

Current Environment Assessment

Core Banking System: At a minimum upgrade operating systems version and production server, and replace development server. Consider option of replacing entire system, a 2-3 year effort with costs in excess of $20,000,000.

Branch Automation System: Study the enhancement/replacement of the Branch Automation in line with the examination of the Core Banking System enhancements/replacement as that decision should drive this front-end system decision.

Infrastructure/Connectivity: The current infrastructure is very sound. There are multiple points of redundancy and back up that are effective.

I.T. Strategy: Determine realistic implementation capabilities and cull list to manageable, highest impact, initiatives. Accountability for each of these initiatives must be very clear and full plans must be drawn up. Ensure Request for Change process is efficient and effective going forward.

User Requirements Most users feel they are adequately served. However, LoBue recommended the following:

• Resolve business process issues.
• Provide for enhanced business information.

Technical Architecture Schematic Given the bank’s size, sophistication and talented IT staff, LoBue found that replacing the core and branch systems with commercially available systems would be more risky, more costly, and have more significant customer service disruptions, while at the same time marginal to no increase in capabilities.

Request for Proposal Document LoBue developed an RFP for the express purpose of replacing the Core Banking Application/Front-end Branch Teller Systems. It can be modified for any type of technology procurement going forward.

Information Technology Strategy LoBue reviewed the bank’s strategic plan and then determined whether the individual departmental plans, including Information Technology, were sufficient to support the bank in achieving its objectives and goals. Half of the technology initiatives were deemed either off-strategy or providing insufficient benefit.

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The client had been encouraged by its brokerage and banking customers to offer domestic and global custody processing service capabilities. The demand for a custody product prompted a feasibility study to assess the requirements necessary to enter and implement this service in the Brokerage Services Division. The project objectives included:

• Develop and document the business requirements for the processing of domestic and global custody accounts.
• Understand the features and benefits clients and prospects would expect from a custody product.
• Survey appropriate systems providers for custody processing applications.
• Compare the requirements of the custody business to the current processing capabilities of the company in order to identify the systems development gap.

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LoBue Associates provided the client with a comprehensive specifications document for domestic and global custody products and an assessment of current systems functionality and capabilities relevant to the custody product including the identification of major systems components and features comprising the development “gap.” A review of the leading custody software products highlighting applications functionality and limitations was also provided. Based on our assessment of the business opportunity compared to the costs involved in implementation, client management decided to discontinue this initiative.

LoBue found that the client had the basic processing capability required to provide domestic custody processing. However, in order to meet the competition in the thriving global custody business, they had to address the identified systems “gap” in detail and assess systems modification requirements and associated costs. The client understood that this would be a major endeavor and was encouraged to avoid the tendency to apply temporary patchwork solutions to meet the identified requirements. LoBue recommended that the client pursue a partnership with selected customers willing to extend their knowledge of the international securities marketplace so that they would further understand requirements in order to develop detailed systems specifications.

The client was a rapidly growing securities business selling through the branches of a national commercial bank. The organization consisted of two entities: the dealer bank in Texas and a NASD broker in Ohio. Operations support existed in both locations and two separate systems were utilized.

With a total lack of automation in the branches and severe service problems, there was a need for a unified system with unified management reports.

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• A mutual funds workstation was formed to process transactions from start to finish and provide all servicing.
• All fund processing was brought in-house.
• Fixed income trading was consolidated.

The client was able to double transaction volume and reduce turnaround on customer inquiries by 60%, while significantly reducing error rates and service problems. A “Critical” Audit rating was improved to “Acceptable” in 6 months and “Superior” in 12 months.

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• Consolidate all operations.
• Bring mutual funds processing in-house.
• Establish a Customer Service unit.
• Consolidate trading desk.
• Utilize single system platform.
• Form mutual funds workstation.
• Design and conduct procedures training.
• Institute production management program.

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The consortium needed to design and implement a reporting and processing system for the diversified investment portfolios of their high-net-worth clients. A major need included combining each client’s holdings from various institutions throughout the world into single statements and reports. The LoBue Group was engaged as the result of a failed program by a major systems consultancy firm.

In the development of a comprehensive project plan and through extensive project management, LoBue provided the total user requirements, detailed process definitions, identification of the data elements, and reporting requirements. LoBue also designed the operating and client service organization, including staffing levels, processes, data and physical security, and levels of customer service. Through the delivery of a system prototype, LoBue ensured the timely implementation for a state-of-the-art private banking system.

In developing this investment and servicing system, LoBue completed the following:

• User requirements and specifications, using an object oriented approach and case tools, for a customized portfolio management, transaction processing, and reporting system
• A system prototype containing all planned functions programmed in C++ and Delphi, and supported by an Oracle database
• Plans and details to develop the processing organization, including staffing, job and process design, and technical and communications support
• Development of the technical architecture, including the selection of appropriate packages for servicing software, reporting software and database
• Total project management, including planning and executing all details of the project from design through full implementation

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The sub-prime lending division of a major commercial bank was experiencing significant loan production volume growth. This growth led to an operations network of five (5) loan production centers defined by inconsistent processes, job functions and organizational structures. Additionally, the lack of a formal management process contributed to poor decision-making in staffing and process management.

The following programs were implemented for the National Operations Group:

• Standardized Process flows for all business channels (Retail, Wholesale & Correspondent).
• Standard Position Descriptions.
• Standard Organization Structure.
• Skills Assessment and Training Program based on new job functions.
• Service Level Agreements established for internal and external services.
• Self Monitoring Program developed to address compliance and quality objectives.
• Management Process defining critical success factors supporting the business goals of productivity, service delivery, profitability and quality.

Additionally, the following quantitative results were realized:

• A 34% productivity improvement.
• $3,032,400 Annualized Salary Expense reduction.
• A 20% reduction in Cost per Loan.
• A 100% increase in Funded Loans/FTE
• The program self-funded in less than six (6) months.

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• Develop a National Operations business model consisting of standardized processes, position descriptions, and organizational structure for all production centers.
• Install a capacity management and resource utilization methodology to enable effective staff scheduling and planning.
• Establish a Comprehensive Management Process, providing managers with critical decision-making information supporting the business strategy.

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The client had a highly qualified and talented group of executives and managers using state-of-the art tools and concepts. They were a sophisticated, but very complex organization with

• Widespread matrix report structures
• Functional duplication
• Unclear roles and responsibilities
• Ineffective performance measures
• Much good thinking, difficulty doing

LoBue was asked to make specific recommendations for optimizing efficiency and effectiveness of this central office, including opportunities for restructuring the organization and operations.

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The benefit from the project’s recommendations totaled $26.7 million, nearly $10 million higher than originally proposed.

An additional benefit was the enforcement of change within Central Office. Challenging the status quo has initiated several change events within the organization. “Creating Centers of Excellence” or “eliminating fragmented functions” have become watchwords to describe the benefits from these reorganizations.

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Create a Customer Focused Organization

• Clarify Employee Roles & Responsibilities by adding detailed job descriptions with clear performance expectations and eliminating the matrix-management hierarchies that can create conflicting direction
• Establish Service Level Agreements to establish accountability to the customer
• Develop Quantitative Performance Metrics to evaluate departmental and employee performance success or failure
• Bind Incentives to Performance Metrics

Create an Organization that Acts as One Company

• Re-Organize Functions into "Centers of Excellence" by removing functional duplication across all central office activities and by aligning product-specific functions into functional Centers of Excellence that support all products within the company.
• Leverage experience and improve career-pathing by reorganizing like functions within a hierarchy that provides common leadership. This encourages frequent and consistent communications, allowing for better leveraging of expertise and more opportunities to share best practices. It is also expected to provide broader career opportunities since employees that were formerly fragmented from their peers can now share in the guidance from function owners and then compete for advancement opportunities in their chosen field.

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