Our client is a leading bank providing Retail, Corporate and Islamic banking services across Oman. The bank has a steady growth in its assets and gross income; however, its operational expenses are relatively high compared to peer banks. Cedar assisted the bank with a quick diagnostic of its current outsourcing partners and developed a way forward outsourcing strategy.
Cedar used a 3-step approach to conduct a quick diagnostic of the current state and developed a new way-forward roadmap:
- Internal Assessment
- Conducted in-depth analysis of all operational processes in the bank to determine process outsourcing compatibility. The processes were broken down into sub-activities for a comprehensive analysis.
- Workarounds were identified for sub-activities to overcome outsourcing limitations and maximize the outsourcing potential of processes.
- External Assessment - Assessed regional outsourcing best practices to identify a typical outsourcing model, processes outsourced, and governance and control structure for outsourced processes. The outsourcing FTE rates were benchmarked with peer banks in the region.
- Way Forward Initiative - Cedar devised a way forward strategy and priority framework for all processes identified for outsourcing based on the internal assessment. The consulting team also conducted an external assessment and advised the bank on the governance and control measures for outsourced processes. The tentative FTE rates for outsourcing were also highlighted.
The program resulted in a best-in-class outsourcing partner review and way-forward strategy for bank with the following results:
- Identified potential savings opportunity of ~ USD 1.7 Mn annually for the bank.
- Identified 185 new processes to be outsourced to onshore and offshore vendors.
- Adapted a targeted 70:30 outsourcing model instead of a 50:50 outsourcing model.
- Enhanced governance and control framework for monitoring the quality of service provided by outsourcing partner.