Our Work

The private banking division of a major US Bank was confronted with extraordinarily high direct and allocated infrastructure costs for its Asia/Pacific operations. There was a lack of coordination between the geographically dispersed operations resulting in inefficient processing and multiple reviews inhibiting production. There appeared to be a misalignment between investment in the various areas and their growth potential. In addition, the bank was projecting a dramatic drop in revenue for the next fiscal year.

LoBue's audit revealed a lack of coordinated effort among the different sales units, poor delineation of functions between sales support and operations, overstaffing, over-controlled processes with double and triple reviews, oversized foreign exchange trading infrastructure, and a lack of MIS, particularly in the investment business.

• All processes were reviewed and rationalized.
• The realignment of investment and business potential in one area resulted in a 40% reduction of direct costs in that area.
• Sales support and operations were realigned to free up capacity for additional sales.
• Sales process was formalized with clearly communicated targets and goals.
• Spans of control were increased to eliminate the numerous one on one reporting structures throughout the institution.
• FTE savings of 20% was achieved.

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• Realign sales support and operations functions in order to better allocate sales capacity.
• Formalizing sales targeting.
• Segment and allocate client base.
• Eliminate one-on-one reporting.
• Streamline process flows.
• Consolidate foreign exchange desks.
• Redefine key investment products.
• Institutionalize sales, product, and operating MIS.

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The credit group was a highly centralized operation that approved all credits over a nominal amount authorized in the branches. Overstaffed with credit analysts, the client had no formal written credit policy or credit procedures. The Credit Support Department was engaged in excessive administrative processes in an attempt to protect the bank against errors or fraud committed by the branches.

• A documented credit policy and procedures manual is in place. Policies are now consistent and protect the bank from previously uncovered risk.
• A loan review procedure allows the head office to confirm compliance with its policies by the branches.
• The newly established workout group allows the bank to negotiate with clients to repair potentially bad loans before problems become irreversible.
• The credit policy clearly delineates responsibility, thus reducing follow-up activity. Communication channels between head office and the field are streamlined.
• Credit MIS that supports the credit policy is now in place.
• Early warning system identifies and manages potentially bad customer credits.
• Credit group has an established management process.

Turnaround time on credit decisions has been shortened by 50%. The loan committee is spending more time on new and significant business opportunities and less on short-term renewals. The reengineered operation provides for growth in processing volumes of 20-30% while reducing staff by 30%.

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• Develop a formal documented credit policy and credit processing procedures.
• Establish a loan review unit and a workout group.
• Eliminate the credit support unit.
• Assign responsibility for all credit files to the credit analyst.
• Create a central liabilities function to insure that the accounting for the credit limits remains accurate.
• Assign responsibility for follow-up on past due accounts and missing documentation to the branches, with exception reporting to the credit group.
• Combine the credit analysis units.
• Develop management processes to measure and control activities in the credit group, monitor and analyze the entire portfolio and evaluate the consumer portion with a view toward future product development.

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This bank identified the need to implement a new IT platform within its international operations unit. The project was three years old and had not progressed past a single pilot installation. Additionally, further evaluation of the current status suggested an additional 27 months to fully complete the rollout.

LoBue was asked to develop a comprehensive implementation methodology and roadmap to shorten the project timeline and decrease the risks associated with the current program failures.

• Provided the client with a road map including benefits, cost and timetable for the reengineering effort, which would guarantee results and install a quantitative-based management culture.
• Developed a standardized reengineering manual.
• Provided the reengineering project plan, including methodology, process, schedule, resources and benefit calculations.
• First year savings of US$13 Million were achieved.

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LoBue determined that the client had an inefficient and resource-intensive organization of 8,000 staff, with process routines that were neither standardized or documented. As a result LoBue recognized the need to conduct a Business Process Reengineering of the process environment before the new system could be rolled out in an efficient manner. Specific recommendations and results included:

• The need to institute an operations reengineering effort to yield substantial benefits and increase the probability of success of the system implementation effort.
• Re-orienting the project assignment from a system roll-out plan to a business process re-design program.
• A reengineering plan for 27 countries which included: scenario, methodology, resource requirements, project management, control process and potential timetable.
• A standard reengineering manual based on LoBue’s PSI methodology, but tailored to the bank’s terminology, concepts and needs.
• The need to implement a two-year project plan which would result in savings of US$15 - $30 million per year.

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The client was experiencing problems due to a poorly organized trade processing environment:

• No formal receipt or registration upon receipt of work.
• No method of formal distribution of work to the various processors.
• No order of dispatch of work back to customers upon completion.
• No MIS tracking of daily work received or completed.
• A lack of line balancing and work distribution.
• A low staff skill level, particularly in key processing areas.
• A poorly organized workplace.
• No differentiation in processing of high revenue customers' work.

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Rationalization of all trade process flows, streamlining operations and improving timeliness and cost effectiveness of service delivery. A 30% productivity improvement and 99% same day service on all transactions was achieved based on:

• Creation, approval and implementation of all process recommendations developed as “best practices”.
• Creation of a new organization structure reflecting market requirements and customer service demands.
• Identification of the requisite skills for each new position within the restructured organization and completion of a skills inventory of the current staff to match current skills to skills required; training of all staff accordingly.
• Determination of management information needs, including review and evaluation of existing MIS and enhancement of reports.
• Development of capacity/resource utilization plans and production standards based on product volumes and processing standards.
• Creation of bank and customer service delivery standards.
• Creation of “priority” services for high revenue “gold card” customers.

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The client was experiencing problems due to a poorly organized trade processing environment:

• No formal receipt or registration upon receipt of work.
• No method of formal distribution of work to the various processors.
• No order of dispatch of work back to customers upon completion.
• No MIS tracking of daily work received or completed.
• A lack of line balancing and work distribution.
• A low staff skill level, particularly in key processing areas.
• A poorly organized workplace.
• No differentiation in processing of high revenue customers' work.

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The recently appointed Head of Global Payment Operations assessed that the five Payment Centers in three South-Asian countries were poorly managed, over-staffed and too costly.

• Payment transactions were processed in various locations outside the payment centers. Risk control and customer service needed to be considerably strengthened and improved.
• Various automated systems were either under-utilized or used inconsistently.
• Payment Centers were organized around product lines within major divisions and were not structured to adequately meet customer needs or deliver products.
• Management information was neither accurate nor adequate.

By implementing the reengineered processes and the Model Payment Centers, the Client Bank realized a direct and sustainable bottom line profitability improvement of US$4.5 million annually. In addition, customer service was enhanced and management decisions were improved through new management reporting capabilities. Improved customer service lead to increased transaction volumes from existing clients and the rate of new client acquisition was increased by over 50% annually.

• Geographically Centralize the dispersed payment operations to maximize operational control and efficiencies and to minimize risk.
• Enhance service and product awareness with improved communication between payment operations and marketing.
• Establish an effective mechanism to allocate expenses and revenues between the operation center and user departments.
• Design and implement MIS to provide useful production, quality, cost and revenue information to all concerned managers at each level in the organization.
• Expand the management span of control and focus on management disciplines.
• Distribute approvals and authorities on a more appropriate basis.
• Perform multiple functions at the same workstation, eliminating unnecessary handoffs.
• Completely re-engineer and rationalize the processes with the aim to eliminate unncessary steps including the excessive transcriptions, reviews, approvals and reconcilements.
• Maximize the effective use of available systems and technology.
• Devise work schedules and shifts to match staff resources with the arrival of work and processing service standards.
• Implement the Model Payment Center to provide an efficient, unencumbered, service-oriented, properly controlled organization and process that will enable delivery of current and future products at reasonable, manageable costs.

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One of the largest banks in the Middle East was faced with the problems of increasing competitive pressure, changing regulations, deteriorating market share, inefficient processes and inappropriate systems. LoBue was asked to assess productivity and service issues across the retail, treasury operations, and accounting areas of the organization and to recommend programs to resolve these issues.

• The Bank realized direct savings of US $5 million per annum with full implementation, inclusive of the costs of establishing and staffing 3 new regional processing centers.
• Achieved more timely management reporting, greater integrity of financial MIS and a sustainable 42% gain in the productivity of the accounting staff, while identifying additional bank-wide savings opportunities related to accounting and reporting functions of approximately US $4 million.
• Eliminated processing backlogs and improved treasury product customer session times throughout the branch system.
• Re-deployed and coordinated inter-group marketing against target customer segments and service staff against customer demand.

The bank eliminated backlogs, improved customer experience throughout the branch system and increased market capitalization by US $900 million.

• Creation of customer service oriented Model Branch transforming the branch network from an inward, production function focus to a customer and service oriented organization. The customer service environment was reorganized around the customers' needs and preferences, to facilitate one-stop shopping for all routine banking services and transactions. Wait times were reduced and facilitated a sales friendly environment. New standards for quality and timeliness insured ongoing service excellence.
• Establishment of a regional processing centers in each region, relocating processing functions from branch customer contact staff to the RPC's.
• Redesigned bank-wide accounting and countrywide treasury operations resulting in reduced accounting errors and reduction in holdover.
• Design and implement a Performance Measurement program throughout all retail and operations areas, capturing volumes for more than 60 types of transactions and/or activities measuring individual, branch and regional performance.
• Rationalize Business Banking including all marketing, customer service and processing functions for Corporate, Middle Market, Small Business and Islamic credit products. Results similar to above consumer improvement were achieved.