Retail banking
The credit crisis of 2008 has been cause and catalyst of a profound reshaping of the competitive environment, regulatory setup and client behavior in the retail banking sector. The post-crisis environment is characterized by low growth rates and margin compression. New service models are emerging to satisfy increasingly differentiated client demands. Retail banks are facing a complex set of new strategic challenges. It is vital that they make the right decisions and implement them effectively.
In brief
Roland Berger's Retail Banking Segment provides pragmatic solutions on a wide range of topics.
Our topic areas reflect the complexity that our clients face in today's demanding environment, responding to their strategic and operational needs. By leveraging our global network of functional experts, we are able to cover the entire spectrum of relevant issues.
We help our clients identify and prioritize their strategic options in the face of market transformations and regulatory reform. We assist them in adapting their service models and product portfolio to the new reality of a sector in transition. Together with our clients, we strive to optimize operational performance by improving the cost basis, their structures and processes. We also work with our clients on issues of risk management and marketing.
Sample projects
The following sample projects illustrate some of our international experience in the Retail Banking Segment.
Developing a growth strategy for an international bank
Background
A subsidiary of an international bank, the leader in a niche market, had a very good track record in serving its clients. To exploit the growth opportunities created by the crisis, the bank asked us to develop a growth strategy for the European market.
Approach
We first identified the key internal competences and the relevant additional market segments.
Next we designed a series of enhanced service models targeting the enlarged segments and increasing the share of wallet within the established customer base.
Following this, we calculated the investment necessary for various options and their likely impact on the balance sheet and P&L. We then drew up a business plan detailing the bottom-line implications of the new strategy.
Results
Our work permitted the client to extend its market footprint in terms of both customer base and product range.
The research into potential customer segments and service models to best cater to them has enabled our client to become a serious competitor in the target segments. With the help of our scenario analysis, the client was at any point able to determine the financial implications of further expansions and could plan to do so in the near future. The roll-out plan further provided the client with a clear roadmap and success KPIs to track.
Optimizing client segmentation and the service model for a leading retail bank
Background
A leading retail bank embarked on a program to improve customer profitability and cross-selling. The bank asked us to design and implement a new sales and service model to realize these objectives.
Approach
We first analyzed the current situation, including the customer segmentation, the related operating and service model and its level of profitability.
Next we optimized the customer segmentation so as to maximize profitability and align the profit potential with the service model. We then mapped old and new segments onto a migration matrix and designed a customer transfer process. Finally we evaluated the implications for IT and defined the requirements for implementation.
Results
Our work permitted the client to improve its average profit per customer significantly and refocus its resources on priority customers.
The detailed segmentation concept formed the basis for a substantial reorganization of the service model and relevant departments. It also enabled the bank to introduce critical service improvements for high-value customers. Moreover, the definition of the IT pre-requisite and the impact analysis sped up the go-to-market time of the new service model.
Realigning the deposit strategy for a large retail bank
Background
A leading retail bank embarked on a program to increase its deposit funds and reduce attrition. The bank asked us to design and implement a program to achieve these objectives.
Approach
We first reviewed the current situation, analyzing attrition according to customer segmentation, product and behavioral criteria.
Next we put together a comprehensive set of benchmarks and best practices for a deposit gathering strategy. We then discussed and evaluated a range of initiatives with the client with the bank regarding its potential for deposit gathering, implementation requirements, costs and returns. Finally we selected the best initiatives, evaluated their impact for our client and defined a roll-out plan.
Results
Our work permitted the bank to effectively realign its deposit strategy. Based on our detailed analysis of the situation, the client was in a position to quantify its funding needs. At the same time, the detailed mapping and planning of initiatives critically improved deposit gathering and the retention of high-value customers.
