1. Summary of best practices session

2. Ms. Amelita Espanola RB Brooke’s Point
Working in far flung areas
Working as a team = “construction/structure/strategy” and “finishing/detail/tactical”
Local area development = market creation
Partnerships with grassroots communities
Challenge now is to balance local area operations versus complex national regulations

3. Mr. Eugenio Demegillo, Jr. Partner Rural Bank, Inc.
A Best Practices Discussion
Leading Research:
Daniel O’Keefe, Ashish Jain
Booz & Co.

4. Executive summary :
- No single method can transform any of a bank’s operations model. - Adopted approach depends on bank’s goal. - Definitely, every bank’s approach will differ then.

5. Suggested five ( 5 ) best practices for transforming Operational model of banks.
Customer – back process transformation.
Product and service simplification.
Aggressive digitization.
Governance and Performance Management transparency.
Delivery model optimization.

6. Banks with successful operations transformation by adopting Best Practices achieve four benefits.
Enhanced Client Experience.
Eliminate client
complaints.
Improved responsiveness
to customers / clients.
Streamline process.
Operational and Cost
Efficiency.
Reduced cost by driving
out variability.
Create capacity and
scale.
Provide cost - effective
services.
Continuous improvements.
Defined standard processes.
Train organization in
process – oriented thinking.
Instill a culture of
continuous improvement.
Risk Mitigation.
Ensure consistent and
auditable controls.
Align operating model
to changing regulations.

7. Atty. Edward Garcia, Jr. Quezon Capital Rural Bank, Inc.
Focus on Governance at the Board level
Foundation of effective governance:
Mutual trust
Respect
Openness to ideas and discussion
Consensus decisions
Critical, but respectful = good, effective relations
These stand despite generational differences
Ex. Actual board meetings, build-up bank to attract next generation

8. E N D

9. Notes by lead researchers:
The 5 suggested Best Practices, combined with aligning the Operational performance goals to business priorities will:
Enhance operations capabilities,
and
Meet transformation objectives.

10. Moreover, your decision on what primary banking business objective you want will determine what approach you will use.
Examples of business objectives and/or purposes:
Drive efficiency and reduce/ increase volume.
Simplify and standardize operations.
Improve customer experiences and customer relations.
So question, what exactly
do you want to do?

11. Customer – back Process Transformation.
Researches show that the 5 Best Practices are common across all initiatives that led to successful transformation of operations:
Customer – back Process Transformation.
Actions:
1.1. Redesign end-to-end process based on desired client experience.
1.2. Analyze trade – offs between level of customization and the value perceived by the client.
1.3. Use a structured, consistent methodology to drive change.

12. 2. Product and Service Simplification:
Actions:
2.1. Minimize customization where the client sees
no value.
2.2. Align cost-versus-complexity trade – offs with
the strategic direction of the bank/ business.
2.3. Standardize processes and supporting
platforms to drive digitization of client
experience.

13. 3. Aggressive Digitization.
Actions: 3.1. Use digital media to create better front-end client inter – actions. (paperless statements, tablet interfaces, etc.) 3.2. Implement straight – through processing to avoid manual processing Form partnership with positioned and non- traditional service providers to build and deploy digital capabilities.

14. 4. Governance and Performance Management Transparency/ies.
Actions:
4.1. Establish and reinforce clear accountabi-
lities, decision rights, and stakeholder roles.
4.2. Define goals and incentives that are clearly
aligned with strategic objectives.
4.3. Adhere to a metrics – driven culture with
key performance indicators (KPI), unit cost
management, etc.

15. 5. Delivery Model Optimization.
Actions: 5.1. Move to shared – services or utility models to maximize scale and reduce costs within banks Integrate and align process – centric IT operational capabilities Increase integration of 3rd – party providers into the delivery model to add variation to cost and to build capabilities.