Scope of Assignment
We were asked by a large Islamic Bank in the UAE to reposition their SME and Business Banking businesses for growth.
A similar request was made by a large, conventional bank in Qatar to design and implement a new SME business. Their target market covered companies with a sales turnover of USD 0-25 Million. The bank had over 17,000 SME customer accounts which it had opened in retail branches over the past few years.
a) BankT&D Consulting designed a detailed differentiated (by sales turnover categories) market entry and repositioning strategy
b) Designed and implemented a differentiated end-to-end operating model pursuant to the strategy which included:
- An effective sales and cross-sell process and organisation
- A differentiated end-to-end risk management process and organisation – including underwriting, approval process, documentation and collateral, early warning, rehabilitation and collections
- A robust marketing process for prospecting, data mining, product development and non- funds cross-sell
- An effective customer service process and,
- A proactive ‘liabilities-only’ strategy for non-borrowing customers including the optimisation of revenue (see below) from the existing liability accounts in the retail branches
We helped design and implement a new (repositioned) business with the right risk-reward optimisation within a 6 month period. When we started the assignment, the business had over USD 500 million in assets, USD 650 million in liabilities, 3,500 borrowing customers and 17,000 ‘liabilities-only’ customers.
Since the implementation of the repositioned strategy, the average annual growth at the large Islamic Bank in UAE has seen Assets grow by 25% and Liabilities by 200%. Similar success in the SME business growth has been achieved at the client bank in Qatar.
In both cases, an important by-product of the assignment was ‘Revenue Maximisation’ from existing ‘liabilities-only’ SME accounts in retail branches. In order to achieve that, BankT&D Consulting helped:
- Re-segment these accounts
- Introduce their proactive management in a differentiated manner by segment
- Implement a process to maximize fee revenue – differentiated account fee structure proactive selling of remittances, FX etc.
- Implement a process to increasing liability balances-new accounts as well as maximising existing ones
- Develop and implemented an on-going seamless process to cross sell a full relationship offering (credit included) to many of these customers who fit the Target Market criteria for a credit relationship
Both banks have seen a 5-fold increase in fee-based revenues in the space of 6 months.