OperationalExcellence(OE) TakeII - Deloitte

1 OperationalExce llenc e (OE ) TakeII ^ Kq~ K` K` ~ c ~ KA Ke y Differentiatorin PrivateBa nkin g in the Context of th e FinancialCr isisOverthepastfewyears, growthandprofitabilityinthepriv ,shiftingexternal conditionssu ch asintensifyingcompetition,consoli dation,adoptionofemergingtechnologiesand ev erchangingclientbehaviour,inparticularin thecontextofthecurrentfinancialcr isi s, realsenseofconcernonthepr ivateclientside,whichmanifestsitselfinde cliningnumberoftr ansactions,pursuitofsecurityaswellasa te ndency toinvestinsimple,lo s background,whatwill it taketogr owandsustainrevenueswhilekeepingmarginsa tat tractivelevelsinsuchanenvironment?

2 Takingon the ChallengeInorderto takeonthesechallenges,wealthmanagementpr oviders(WMP) arepurs uinga mult itude ofdifferentiationinitiativestoadjust tothecurrentcompetitivela ,commonst rategic di fferentiatorsaddress specificfo cus ationalEx cellence (OE)remainsthemostcomprehensiveandbalanc eddriverofdifferentiation,addressingthel a rgestnumber offo eas in the co ntextof th e financial cr isisIncreasetransparencyand frequencyincommunicationRefocuson clientrisk/returnprofileFocuson easy-to-accessand easy-to-dealwithprivatebankers,and simplifyprocessesEnhancepro-activenessan d anticipationof clientneedsSimplifycertainproductsEnhanc earrayof products(strivefor optimalopenarchitecturerealization)Reduc e# of relationshipsper RMEnhancetechnicaland productskill-setof privatebankersExploitpotentialsynergiesb etweenIB, AM and PBfunctions,if possibleProducemorereliable,timelymanage mentinformation(MI)

3 ,and comprehensiveexternalreportingStrategicD ifferentiatorsFocusAreas(Extract)Operati onalExcellenceCustomerIntimacyProductLea dershipBrandChampionshipSou rce:Dis cussionswithCEOsof various Swissbas ed Private Ban ks (2009); Deloitte Su rvey Reconnecting for Pro fit (2008)Re levance= High= Medium= Low2 Inourconsultingworkforleadingprivatebank sandwealth managementproviders wehaveidentifiedseveral crucialareaswhereanincreasedfocusonOEint othoseareaswoul d leadtoskyrocketingoperational performance(note:thedatava riessignificantlybetweenthedifferentplay ers, ,priv atebankers,univer sa l banks,cantonal andregionalbanks). Particularly,thesear easarelo catedacrossthefront-andbackofficesfocusi ngonprivateclie morestandardizedapproachinrelationtocust omeracquisitionandcustomerservice, (CC)viahavingmoreeffectiveclientfacingti me(CFT)andthereforeenhancedAssetsunderMa nagementandAdministration(AMA).

4 CFT 20%CC 10%AMA 9%FrontOffice/ClientRelationshipManageme ntTheRMsofthisWealthManagementProvider(W MP) ,trade,andproductaswellasresearchinforma tioninordertoreducesalesplanningtime(SPT ).Hence,thissavingintimecouldbeadoptedfo rclientfacingtime(advisoryandsales).SPT 20%CFT 20%BackOfficeServicesA PrivateBanklackedclientcentricity, 40%STPrate 20%Processingtime 40%EarlyWarningClientRetentionInthisspec ificPrivateBank,over15% professionalclientretentionprocesscoveri ngthefollowingfourmainintentions: Fosterclientcontact(CC)byacceleratingcon tactwithclientsatrisk ManagebyexceptionbyhelpingtheRMidentifyi ngclientsatrisksrapidlywithminimalworklo ad Widenclientprioritizationbasisbyhelpingt heRMprioritizenotonlyaccordingtoAMA,last contactdate, Definebestprocessesbyprovidingsupportret entionofclientsatriskaswellasbyproviding trackingsystemformanagersCC 20%Administrationtime 10%MoneyOutflow 90%PerformanceandProfitabilityManagement WMPsoftenstruggledtoobtaina clearpictureofhowprofitabletheirbusiness lines,RMs, 5-levelprofitscheme(andspecificallocatio nkeys)

5 Strongimpactonclientandproductsellingfoc usinthedifferentmarketswitha 10%Bottomlineprofitability 10%Productdevelopmentandmanagementcosts 15%BenefitIndex=Increase=ReduceOE in PrivateBankingRealLife SuccessStoriesDeloitte referstooneor moreofDeloitteToucheTohmatsu ( DTT ) , a SwissVerein,anditsnetworkofmemberfirms, eachofwhichis a legally separateandindependententity. \aboutfo r a detaileddescriptionofthele AGis a subsidiaryofDeloitteLLP, AGis publicationhasbeenwrittenin general termsandthereforecannotbere liedontocoversp ecificsituations;applicationoftheprincip lessetoutwill dependupontheparticularcircumstancesinvo lvedandwerecommendthatyouobtain professionaladvice beforeacting or re frainingfromac tingonany ofthecontentsofth is edtoadvise readersonhowtoapplytheprinciplessetoutin thispublicationtotheirspecif ic circumstances.

6 DeloitteAGaccepts no duty ofca reorliabilityforanylossoccasionedtoanype rsonactingorrefrainingfromactionasa resultofanymaterialinthispublication. oducedbyMarketing& CommunicationsatDeloitte,Zurich000105_20 09 Cho os ing the RightCombinationIntoday s complex businessenvironment,it takesa teamwiththedepthandbreadthofknowledgelik eourstoadviseclientsaswellasindividualsw ithstrongpr inciplesandvaluestodoit ants bringtherightcombinationofmulti-discipli naryex industryknowledgeandstrategic, operational,andtechnicalex pertisewithprovenmethodologiesandtools todeliverhighvalueadvisory servicestothefinancial anytechnologysolutio n orsu atio ns hipsOurstrengthliesinthesuccessfulandhan ds-onex ecutionofprojectswithclearly measu rableresult s.

7 Wecult ivatelong-termre lationships withourclientsandassistthemin creatingsustainable universalbanks, privatebanks, insurance companies,investmentmanagementgroupsandp ension pl ans,finance andleasingcompanies,merchantbanks,securi tiesfi rms andbro nancialServices/PrivateBankingInd ustryExperienceWhatdistinguishesusfromou rcompetitorsis ourin-depthknowledgeofthefinancial, respectively, fiedprofessionalswork alongsidepractitionersandpolicymakersin theindustrytoof ferouts bal Access LocalTouchWebelievethat weperformatourbestbecausewehavea cesstoa wealthof insight , but tere sted?Ourfinancialservicesteamwouldbeplea sed toadvise youonhowtoapply Deloitte sPrivat e BankingOperationalExcellenceFrameworkto easedonothesitatetocontactour Dani el KoblerDirectorPrivateBankingIndustryTel.

8 :+41(0 ) 444216849E-Mail:dkobler@deloi visit ou r hom ep age:www . DeloitteDifferenc