While developed countries are still recovering from shocks to the global financial system, countries throughout Asia, Africa and South America are growing rapidly. Once dependent on foreign aid, many of these countries are now a critical part of the modern global economy. Optimism and opportunities abound in these nations as they become major international players.
The financial industry is a leading sector and a driving force for strong private sector growth in these economies, with average expansion rates exceeding three times real GDP growth. Banks, insurance companies, asset managers, payments providers and other industry players have established themselves as professional national or regional players. They are now facing situations in which Roland Berger can provide valuable expertise.
Roland Berger's Financial Services Competence Center has a decades-long history of completing successful projects in emerging markets. Since the 1970s, our firm has been an early mover into markets like Brazil, Eastern Europe, Russia and China and most recently North Africa and the Middle East, Sub-Saharan Africa and India.
Our mission is to provide the same type of top-quality and implementation-ready expertise our clients in mature markets appreciate. Roland Berger understands the relevance and prospects of these markets and has therefore assembled dedicated teams, located in the regions and able to blend international best practice with local market expertise.
Roland Berger experts work on a variety of topics for a wide range of institutions, and have been selected for their outstanding quality by international players and local or regional champions alike. Our teams have successfully completed projects for the leading banks, insurance companies, payments providers and private equity investors in a broad range of emerging markets. From established players such as Brazil, China, the United Arab Emirates, Turkey and South Africa to the newer group of dynamic economies including Nigeria, Tanzania, Colombia, Angola, Morocco, Peru and Egypt.
In addition to private sector clients, Roland Berger has been chosen for public sector assignments by regional and national ministries, central banks, financial regulators, financial stabilization funds, development banks and agencies. Lastly, an expanding part of our work is for international organizations and NGOs, such as the World Bank, the International Finance Corporation, and the Bill and Melinda Gates Foundation.
For emerging market clients, Roland Berger offers the full scope of international financial sector expertise, from retail banking to corporate and investment banking, insurance and reinsurance and from market entry strategies to post-merger integration and efficiency. Specifically for these markets, our dedicated teams have also built up strong expertise in topics that reflect the unique challenges there. This includes financial inclusion, microfinance, microinsurance, alternative distribution channels, informal financial services, mobile financial services, agricultural finance, alternative cards and payments solutions.
Roland Berger is strongly committed to growing with clients in emerging markets and continuously expanding our presence, opening new offices (e.g. in India) in 2011.
Topics specific to our work in emerging markets include the strategic opportunities at the interface of banks, insurance companies and mobile network providers, the expansion of financial services via alternative channels to the low-income and rural population, and financing solutions for agriculture and SMEs throughout the value chain.
The following sample projects illustrate some of our experience in our Emerging Markets Segment:
International retail optimization for a large European bank in Asia, Africa and the Middle East
A large European universal bank had built a wide retail banking presence in emerging markets throughout Asia, Africa and the Middle East. The bank's operations, which had evolved over several decades, required a group-wide project to set goals for each division. Roland Berger was asked to identify initiatives to increase sales and cut costs, mobilize and link all countries for the project and provide structures for globally consolidated results. The respective countries included e.g. Turkey, Ukraine, Vietnam, the United Arab Emirates, Morocco, Egypt, Algeria and the Ivory Coast.
Our team set up the project across various Roland Berger offices in emerging markets to support the group-level analysis with local expertise and proximity to decision-makers in target countries.
Several key topics to address were identified by a quantitative analysis of global performance and in conjunction with leading international retail operations companies. These were followed by a series of thematic workshops with participants from target countries. In the next step, a number of key initiatives with the highest potential impact were identified. These were investigated locally in the various countries and validated in terms of relevance and content. Out of this exercise, the impact of all initiatives was quantified in order to prioritize the to-dos, and further specified with actions to leverage the identified potential.
For group-level controlling and coordination, results were consolidated across countries and mapped in a management tool.
Our team studied 30 initiatives and identified savings potential exceeding EUR 80 million (more than 13% of the original cost base in international retail). We also identified actions to increase sales by EUR 250 million p.a. (more than 12% of steady state). The client has since successfully started to implement these measures.
Purchase of the leading cards and payment services provider in Nigeria and West Africa by a large Africa-focused private equity firm
A large Africa-focused private investment firm, with USD 1 billion in committed capital from top-tier international investors, was considering investing in Nigeria's leading ATM card, electronic transaction switching and payment processing services provider. Based on its strong sector and regional expertise, Roland Berger was asked to lead the due diligence of the acquisition target and conduct a commercial assessment of the payments and cards market in Nigeria and Africa.
Our team laid out the structure, timeline and tasks of the commercial due diligence and coordinated the efforts of outside experts, lawyers and investment advisors in close liaison with the client. Roland Berger also provided the virtual data room and managed the data requests from the target firm. Based on primary data and interviews with management, competitors and experts, Roland Berger analyzed financial and operating performance of the target firm, highlighting red flags, areas for attention and action required.
A comprehensive assessment of Nigerian, African and international market trends, peer benchmarking and estimated potential for individual initiatives including respective enablers and obstacles was undertaken to support the valuation and outline priorities for future growth. This exercise built extensively on Roland Berger's expertise in African and other emerging markets for financial services. Roland Berger also supported the client with business modeling and a scenario and risk analysis, as well as compiling the reports and recommendations for the investment committee.
Based on the report to the client's investment committee, the transaction was approved and carried out, with the final price reflecting the recommendations resulting from the due diligence. The investor plans to implement the growth opportunities and improvement potential as identified and highlighted by Roland Berger's team. This would establish the company as the unrivalled leader in cards and payments throughout emerging Africa.
International expansion of the private banking subsidiary of a large Brazilian financial services firm
Our client is the private banking unit of a leading Brazilian financial services conglomerate. After years of strong growth in the domestic market, new opportunities in offshore private banking worldwide and in Latin America were to be explored. Based on its strong standing in the Brazilian financial sector, Roland Berger was asked to lead the strategic and operational planning for this international expansion.
Our team mapped challenges that international players in private banking face in terms of market segments, products and services, wealth management and back-office operations. Target markets were identified and assessed by calculating market potential and by identifying key growth factors and barriers to entry. An action plan for attracting the offshore resources of Brazilian clients currently held at other institutions was also designed.
In the process, the entire operating model of the client was revised, the organizational structure redefined to coincide with the requirements of an international platform and a support infrastructure for offshore financial services designed. A training program for employees to reflect these changes was also drawn up.
Our project work created the right conditions for implementation at our client, by providing them with a detailed action plan for establishing offshore private banking platforms, including the structure and a selection of products and services. The entire organizational model for international operations was redefined and implemented based upon Roland Berger recommendations, and facilitated by employee training throughout the group.
The client has since established strong offshore operations and attracted both Brazilian and international clients.