The world of banking and finance has been in a state of constant change since the latest economic and financial crisis. On the one hand, heightened regulations pose a significant challenge; on the other, customer behavior has changed massively. Private customers are fleeing into low-risk and liquid investments, which leads to reduced demand for high-margin products and services. The persistently low levels of interest continue to exert additional pressure on yields.
Digitization is also resulting in massive changes, as classical sales channels are increasingly being replaced by digital ones. This means there is less and less direct personal contact with the customer; moreover, they also expect a comprehensive multi-channel portfolio from their banks.
Banks and financial institutions are reacting to this immense pressure to reduce costs with large-scale restructuring programs and measures for continuous efficiency enhancement and permanent cost optimization. Strategies and business models are being adapted to suit the changing customer behavior and to adjust cost structures sustainably in line with the lower profit expectations.
We support our clients in mastering these many and diverse challenges: From strategic issues, through operative implementation in the organization, the processes and the IT system, to anchoring in the performance management systems. We let the results speak for our performance – right from day one.
The business models of banks and financial institutions are significantly different from those in other industries, and they operate in a highly regulated environment. In order to be able to deal appropriately with these specific challenges, alongside our cross-industry competences our teams of experts offer special solutions for banks and financial institutions:
With our Strategic Excellence approach we provide our clients with support in strategy development and in designing and implementing their strategy process – especially against the background of the minimum requirements for risk management (MaRisk). Together we will analyze your current state, develop your corporate and division strategies and implement them with the help of a strategic targeting system which will make implementation and target achievement measurable.
In order to anchor the strategy in your company, we accompany banks and financial institutions in the development and implementation of incentive systems and ensure they are compliant with current laws. Additionally, we have extensive change management experience to ensure we engender the willingness to change in your organization necessary for successful implementation.
Among other things, our portfolio of services includes:
- Strategic positioning options for the entire bank
- Development of cooperation and sourcing strategies along the value chain
- Integrated strategy process design in line with MaRisk
- Strategic investment prioritization
- Strategy-based incentive and remuneration systems with due consideration of regulatory parameters
- Calculation of the degree of digital maturity and development of an individual digitization strategy
- Integration of FinTechs into the strategy process and along the value chain
Sales Performance Excellence
Competition has also increased sharply in recent years in sales, while at the same time demands from both customers and bank supervisory institutions have continued to grow. These give rise to further demands upon the sales strategy and its implementation.
We support our clients in developing their sales and growth strategies and help them to generate sales success by raising the net sales time and optimizing their customer service and advisory approaches. We also accompany them in the design of multi-channel concepts in order to focus their different sales channels holistically on sales performance and profitability.
We continuously identify and analyze current and future success factors for sustainable, earnings-based growth in sales as a part of our studies on Sales Performance Excellence. Our short surveys provide executives in sales at board and division level the possibility to analyze their own Sales Performance Excellence and compare their position with the other participants.
The main topics of our service portfolio are as follows:
- Development of business and growth strategies in retail banking, affluent and private banking, wealth management and corporate banking
- Development of strategies and target operating models for customer-centric omni-channel sales
- Optimization of customer segmentation, customer service concepts and advisory approaches
- Optimization of net sales time
- Reorientation of sales processes and sales organizations
- Ongoing development of sales performance management and sales controlling
Horváth & Partners support banks and financial institutions in creating efficient and effective value chains through the integrative use and shaping of process-based, organizational, technological and cultural factors.
The main tools include the introduction of production performance management systems and factory approaches in the banking and finance sector, as well as in the industrialization and optimization of core business processes. When doing so, we take suitable measures to adapt best practices from the manufacturing industry to the business models of banks and financial institutions. Additionally, our holistic process management approach includes establishing overarching process management governance and sustainable, continuous process optimization approaches.
Our ongoing study “Operational Excellence in Financial Industries” provides the COO and those in charge of operations and organization at board and division level the possibility to analyze and compare the maturity of their operational excellence.
The main topics of our service portfolio are as follows:
- Structured analysis and identification of optimization potentials with the Horváth & Partners OpEx Maturity Assessment
- Establishment of a holistic process management system and anchoring of lean banking approaches
- Improvement of service quality through comprehensive quality management
- Industrialization and end-to-end optimization of core business processes (credit, bank deposits, investments, partners)
- Efficiency enhancement and service excellence in middle- and back-office units
- Concept design and development of integrated production planning and performance management systems
- Ongoing development of capacity management and establishment of workforce management
- Supervision of change processes for teams and management executives (Change Management)
Transformation, Cost Efficiency & Profitability Enhancement
We are a leading provider in the supervision of transformation projects. One of the core competences of Horváth & Partners is the concept design and implementation of sustainable efficiency, cost-cutting and profitability programs. Our Transformation Framework offers a holistic approach for the sustainable orientation of your company towards profitable growth. The main guiding principles for the target operating model are derived from the strategy. The efficiency enhancement in the front office focuses on both earnings and cost reduction. Typical levers include, for example, target markets, customer and coverage models, sales network and channels, or the product and services portfolio. When it comes to the middle and back offices, cost aspects dominate, for example from the IT platforms and facility management, from the industrialization of operations, and from target-based project and demand management. The interface functions are often also part of a transformation project, with the typical levers here including competence and remuneration models, cross-function end-to-end process optimizations, purchasing and procurement optimizations, and professionalization of services management.
If the existing operating model should not only be optimized but completely overhauled, there are other aspects which become important, including shared services, outsourcing, M&A and spin-off or company sales, as well as location concepts (near- and off-shoring). To ensure proper embedding in the company, it is often necessary to adjust performance management and cultural aspects, which can include performance management and incentives systems, sustainable cost management, cost and continuous improvement cultures, and staff development.
Finance & Risk Excellence
The implementation of new far-reaching regulatory requirements, dealing with the persistently low interest rates, and high competitive pressure – in part caused by new market players such as FinTechs – continuously creates new demands upon CFOs and CROs in the banking industry. These volatile market conditions frequently require a reorientation of the business models.
At the same time, the performance management of banks needs to be revamped to harmonize economic and regulatory aspects, while a significant optimization of the business models is also necessary (Target Operating Model).
We use our Finance & Risk Excellence approach to offer executives, senior managers and CxOs in the finance and risk functions of banks and financial services companies a wide range of solutions in terms of:
- Redesigning the CFO and CRO strategy in the light of the changing regulatory frameworks and new digital competition parameters for banks
- Further developing overall bank performance management to create a harmonized approach to economic, digital and regulatory control variables
- Adapting planning, forecasting and reporting on the basis of both the new digital performance management approach and regulatory requirements
- Redesigning and transforming the operating model for finance and risk management functions
- Leveraging digitization potentials with the help of predictive analytics and uniform data storage concepts by using business intelligence solutions and Big Data approaches aimed at integrating the performance management requirements of the finance and risk functions
Our ongoing study "Finance & Risk Excellence" provides an excellent basis for determining the status quo and deriving your target image using comparative analyses with the market.
We offer a holistic and integrated approach to IT performance management based on tried-and-tested approaches of corporate performance management. Our clients are both IT service providers for the financial services industry and internal IT departments from banks and financial institutions. We have many years of experience in sourcing IT services, especially in comprehensive tendering and award management from tender concepts to transition including sustainable service provider performance management. Our expertise in the management of major IT projects and programs rounds off our service portfolio.
The main topics of our service portfolio are as follows:
- Deriving the IT strategy to implement the digitization agenda
- Setting up and optimizing value-based performance management concepts in IT and operationalizing the IT strategy (strategy map, balanced scorecard)
- Carrying out target-based further development of IT through the introduction of innovation management approaches
- Introducing cost performance management, cost transparency and cost allocation for IT including IT planning and reporting, IT performance management, service and project portfolio optimization, and the creation of cost transparency, as well as optimization of IT efficiency
- Optimizing provider performance management, especially in the context of sourcing
- Designing the concept, preparing and supervising the transformation of CIO, COO and CDO functions into an overarching IT organization approach
- Designing and implementing the concepts for target operating models in IT
At Horváth & Partners we offer deeply-rooted expert knowledge in setting up IT and process platforms for the digitization of core business processes in the finance industry. We are a one-stop shop for the necessary industry and IT expertise, combining business and IT transformation synergetically and putting current technology know-how at your disposal:
- Concept design and structure of digitization and processing platforms
- Further development of the digital IT and process architecture
- Selection and introduction management of IT solutions for production and platform management in operational units
- Strategic and commercial optimization of the IT architecture of banks and insurance companies