For many years, banks operated in pretty much standard ways, with little changes and challenges to their ways of working. However, banks have had to adapt their operating model dramatically in the last few years. Competition, customer expectations and rising costs have changed the banking industry in far reaching ways. This is before we factor in the devastation wreaked by the COVID-19 pandemic. From customer interaction models, to people, process and technology, all parts of a bank’s operating model have been significantly impacted.
As customers move towards digital transactions, banks need to identify ways to serve customers across channels in a profitable manner, while delivering a superior customer experience. This has implications on the following areas of the banks operating model:
- People | the structure, loading and skillsets required within the bank
- Process | the processes that need to be streamlined across high impact areas
- Technology | the technology backbone and enablers required to deliver the operating model
Defining a strong Target Operating Model is crucial to delivering financial benefits for a bank
How we add value
- Design Target Operating Model: Cedar has helped leading banks around the world design their Target Operating Model to enable them to drive a best-in-class customer experience, maintain efficient operations and maintain strong controls. Cedar’s design principles embrace a digital focused and Straight Through Processing (STP) driven operating model to enable banks to compete in a digital led environment
- Process Definition: Cedar assists banks with developing end-state process flow diagrams to enable clarity across the bank’s employees. These are typically customer facing high priority process flows that are likely to have the most impact on the bank. Cedar’s methodology includes conducting conversations with Business and Operations to identify long list of processes, identifying system dependency, high-level workflow requirements and bank’s need for change.
- Organization Design: Cedar develops organization structures and governance models that are aligned with the new Target Operating Model. Cedar’s methodology includes reviewing the current organization structure with respect to current functions and their reporting lines, accountabilities and responsibilities (discontinuities and / or overlaps), alignment with business plans & TOM. Cedar conducts discussions with internal stakeholders to understand requirements for supporting way forward plans and requirements.
- Branch Format Design: Cedar designs the branch distribution network for banks by reviewing their existing distribution framework around number of branches, location, sales productivity & profitability of branch & underlying headcount/branch. Cedar also recommends potential for adoption of newer branch formats such as small format branches, digital branches and 24/7 branch zones, and inputs on best practices for utilization of branches by Corporate & SME desks, and potential formats to adopt.