BCG - The Boston Consulting Group

Situation

The client, a leading Chinese bank, had been one of the fastest growing banks in China over the previous five years, continuously transforming itself, and adopting leading management practices and disciplines. To support its newest business strategy and aggressive growth targets, and to comply with directives from the China Banking Regulatory Commission (CBRC), the bank wished to embark on an ambitious program for which it needed BCG’s help. The aim of the program was to restructure the entire bank, from headquarters to branches and outlets; the restructuring would impact every business line and function.

Approach

We took a three-step approach to help the bank effectively roll out its program. In step one, the BCG team conducted both qualitative and quantitative diagnoses, including intensive management interviews and discussions, branch visits across the nation, mystery shopping at bank outlets, business performance analysis, and root cause identification. We also researched how other leading global banks had implemented similar initiatives, looking for common themes, patterns, and trends. Our research uncovered a number of major improvement opportunities. In step two, we recommended a new operating model and a revised governance and organizational structure that incorporated refined key performance indicators. In addition, we suggested a number of core management processes to help strengthen organizational capabilities and align the organization with the new business strategy and direction. Finally, in step three, we developed a migration plan. It utilized a phased approach to ensure that the new design could be implemented across the entire operation, taking into account the bank’s unique challenges, as well as China’s regulatory requirements.

Impact and value created

We were able to build consensus among the bank’s senior management on the correct direction around future governance, as well as the new operating model. The bank decided to adopt our recommendations, and directed its various business lines and functions to carry out the transformation initiatives. This project raised significant interest within the local banking community, including the CBRC. We are proud of our involvement, which not only delivered beneficial results for our client, but also stimulated positive debate in the banking industry.

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