Developing Business Banking Capability in the Branch Network

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Developing Business Banking (Capability) in
the Branch Network
Brendan NevinDirector of Strategy Marketing
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Content

• Introduction to Bank of Ireland
• Our Structure
• Our Segmentation Model
• Our People - Core Strategies
• Best Practice Relationship Management
• The Concept
• The Process
• The Framework
• The Management
• Local Market Planning
• The Objectives
• The Principles
• The Outcome

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Bank of Ireland Who we are

• Ireland
• Mortgages Personal Banking
• Business Banking
• Wealth Management Assurance
• Asset Management
• Corporate Finance
• UK
• Mortgages Personal Banking,
• Business Banking
• Corporate Banking
• Post Office Joint Venture
• International
• Asset Management
• Corporate Banking
• International Lending

• Founded in 1783
• 17bn market cap.
• 14 of the ISEQ
• Sept 06
• 178bn Assets 22?
• 1.9bn Income excl. core items 14?
• 852mn PBT 28?
• 15,851 Staff

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Ireland the market we operate in

• Population 4.2 million
• Favourable Demographics
• Full employment
• Educated workforce 2m
• Real GDP growth
• 7 pa 1997 2005
• Low corporate taxes
• 12.5 Corporation Tax

Future Outlook Positive An Attractive Market
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(1) SME Market Segmentation Strategy
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Irish SMEs are performing strongly

• 250,000 SMEs in Ireland, 60 of workforce.
• gt20,000 new businesses likely to start this year.
• 2nd highest level of entrepreneurship in EU.
• High growth in construction and services

But challenges remain
Only 5 of Irish SMEs intend to expand abroad in
the next 12 months
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but are weighted towards Small Business
Breakdown of SME Customers
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Which reflects itself in our structure
Group Chief Executive
Retail Banking Rep. of Ireland
Capital Markets
UK Financial Services
Bank of Ireland Life
Business Banking
Corporate Banking

• 160,000 customers
• SMEs
• Self Employed
• Start-ups
• Agri

• 2,000 customers
• Public Limited Cos
• Multinationals
• Large Property Deals
• Loans gt30m

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We operate a multi channel strategy
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With a segmented Customer Management model
All supported by Sectoral Product specialist
teams
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Strategy consists of 2 key components
Vision
Number 1 Bank for SMEs in Ireland
Priorities
What In the Channels
How In Operating Model Back office

• Local Market Planning
• Best Practice Relationship Management
• Our People

4. Multichannel Service Model 5. Credit
Operations 6. IT applications and Infrastructure
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Channel Strategy focusses on differentiation
through People

• Best Individual Bankers In the
  
• Best Teams

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Individual Excellence The Business Banker
(2) Best Practice Relationship Management
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Best Practice Relationship Management
Improving Business Banker Productivity is a
worldwide challenge
SME Newsletter 5th April 06 (USA) 7
Recommendations
1. Pull apart and assess the banker's job today
to determine where bankers are spending their
time. 2. Decide what level of productivity they
want from their bankers. 3. Move as many
non-sales activities as possible to others.
4. Introduce strong team/sales managers with
responsibility for ensuring high levels of banker
selling. 5. Institute an account planning
process to improve the quality of calls made.
6. Change compensation to encourage/demand
higher sales. 7. Fire those managers or bankers
who do not perform.
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Why focus on Best Practice Relationship
Management?
But only 53 of SMEs with an RM say they are
satisfied or very satisfied with their RM
65 of SMEs have, or perceive they have,
a dedicated Relationship Manager
71 say their RM is an important aspect
of dealing with their BCA provider
Relationship Management in Business Banking
(MORI, 2006)

• Across key measures, 53 of SMEs are satisfied
  with accessibility of their RM, 44 are
  satisfied with proactivity and 50 with the
  quality of meetings
• Customer experience with their RM is strongly
  linked to overall satisfaction with their bank
• There is a clear opportunity to differentiate

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Clear Deliverables are Required to achieve
Differentiation
How We Decided to do it
What we needed to do

• Achieve Best Practice Standards
• Planning the Portfolio
• Preparing for Meetings
• Running effective meetings
• Actions follow through

Build Competencies and Skills To Deliver
Standards through Coaching and Performance Mgt.

• In the past we have focussed too much on Process
  and Technology.

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Traditionally we have focussed on skills

• Credit Policy
• Securities
• Mgmt/control- accts, loan bk, cr grading
• Fin analysis (incld repayment capacity)
• Non-financial risk analysis
• Bus knowledge (mktg, mgmt, production)
• Risk/return analysis
• Credit applications
• Letters of offer
• Compliance
• Well read/knowledgable on topical business issues

Credit Management Underwriting
Product Knowledge
It is a mistake to focus on skills and not on
Competencies

• Core products, credit products
• Resource products incl BOI Life
• Competitor products
• Interest Fees

PC Literacy Skills

• Lotus notes
• Opening using email attachments
• File management
• Insite navigation
• Microsoft Work
• Microsoft Excel
• Microsoft Powerpoint

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..but our Competency Framework is now Key

• 1. Core Personal Cluster
• Drive
• Confidence
• Professionalism
• Influencing
• 2. Management Cluster
• Building Effective Internal Networks
• People Management
• 3. Customer Cluster
• Business Acumen
• Scanning and Planning Opportunities
• Client Focused

Competencies cover the 3 key aspects of the
Business Bankers Role
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Some sample Competencies explained
RBM
SBM
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Some sample Competencies explained
RBM SBM
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Competency development must be supported by a
Coaching Plan

• The Manager becomes a Player/Coach
• The Coach assesses the RM on Standards
  competencies based on observation data
  collected
• Areas to be developed agreed as part of
  quarterly appraisal process
• Feedback is provided against the specific areas
  identified for development
• Actions agreed

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Success is dependent on moving from Management
behaviours to Leadership behaviours

• TO
• Leader and Coach
• Delegation/enabling
• High performance team leader
• Builds belief and desire
• Collaborates internally
• Shares power
• Builds superior capability

FROM Supervisor/Manager Control Administrator Reli
es on fear Competes internally Seeks personal
power Tolerates Mediocrity
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Early signs are encouraging

• Business Managers are now very clear on their
  core role/tasks - measured on inputs and outputs
• Competency development is motivational and
  developing better Business Bankers.
• Managers are clear on what to coach to, when to
  coach, and have clear opportunities to coach

We are prioritising our high value
customers Productivity has increased Customers
have noticed the difference
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Collective ExcellenceThe Team
(1) Local Market Planning
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Harnessing The Power of Local Knowledge With
Central Supports..
LOCAL MARKET TASKFORCES
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Harnessing The Power of Local Knowledge With
Central Supports..
LOCAL MARKET TASKFORCES
Local Market Clusters

• 254 branches split into 66 local market
  clusters
• Unites 600 Personal 500 Business Bankers into
  local task-forces
• Powerful local focus

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Harnessing The Power of Local Knowledge With
Central Supports..
LOCAL MARKET TASKFORCES
CENTRALISED SUPPORT TEAMS
Local Market Clusters

• Products
• Wealth Management
• Assest Finance
• Global Markets

• 254 branches split into 66 local market
  clusters
• Unites 600 Personal 500 Business Bankers into
  local task-forces
• Powerful local focus

• Marketing
• Data, Research
• Tendering Support
• Marketing Collateral

• Intermediary Team
• Drive referrals
• Lending support
• Identify opportunity
• Coaching

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A Prescriptive Approach.. The Cluster Make-up

• Senior Branch Manager (commercial) cluster
  leader
• Branch Managers (retail)
• Senior Business Manager (RM)
• Business Manager (RM)
• Business Advisor
• Insurance and Investment Managers
• Commercial Finance Manager
• Cluster Administrator
• Regional Management (selected meetings only)

Core Team
Key Roles
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A Prescriptive Approach.. A Clear Agenda

• Review of key actions
• Review of headline activity since last meeting
• Review of planned activity next 4 weeks
• Any other opportunities were missing?
• Key Business Banking messages
• Presentation from Product Business Rep
• Wrap-Up

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A Prescriptive Approach.. Defined Inputs
Outputs, locally led
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and now generating more of the right behaviour

• Teamwork and collaboration
• Clarity for everyone..each has a role to play
• New Leadership behaviours.

• First to the deal more often
• Business referrals between roles up significantly
• Market reputation enhancedhunger
• Significantly more Intermediary referrals
• New business pipeline is very strong
• Most tangible on-the-ground profile
• Approach being copied by competitors

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And combined with BPRM, accelerated Lending
Growth..
Term Loan Book Doubled in 3 years
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and broader Business benefits

• Increased Business Account opening
• Increased cross sale into existing customers
• Improved Customer satisfaction
• Clearer staff roles

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So in summary - Differentiating through People is
a Paradigm shift

• Its about individual excellence based on
  clarity, competency and behavioural standards.
• Its about collective excellence based on
  Teamwork and collaboration.
• Its about coaching individual development to
  deliver performance excellence
• Its about excellent employee engagement through
  listening and effective follow through

The paradigm shift is about creating new
Leadership Behaviours
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So in summary - Differentiating through People is
a Paradigm shift
And in our experience it works!!!
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Thank you for your attention