process efficiency review

Process Efficiency and Organization Review

Take the right steps - A pragmatic approach
for pragmatic results .
Synthesis

June 13th 2012
Advisory & Consulting Services

Agenda

Objectives of the meeting
1. Explain where we stand
2. Provide key results of our analysis on:
• Organization
• Processes
• Branch and unit network
• IT governance and project management
3. Validate IT organization structure option
4. Next steps

2 Kapital Bank Process Efficiency and Organization Review © 2012 Deloitte Tax & Consulting S.à r.l.

Table of content

1 Approach – where we are 4

Key recommendations for Organization and Process
2 6
Efficiency

3 Branch and units network analysis results 10

4 IT Stream review: approach and key findings identified 12

5 Timeline and next steps 15


The approach can be summarized in the following 4 steps
We are
here
26/03 26/06

III Synthesis IV Roadmap

Recommendations Definition of a Roadmap for
II
Universe Definition recommendations
• Re-classification of implementation in line with pre-
identified issues around 2 agreed prioritisation criteria
Information
I main resolution themes and
Gathering • Classification and 5 relevant work streams for
formalisation of all Streams, except for IT
identified issues • Re-classification of
• Spell out of actionable identified issues around 2
• Interviews analysis
recommendations and main resolution themes and
• Documents and data
related benefits 7 relevant work streams for
analysis
IT Stream

• Understanding of Kapital • Draft list of identified • Validation and agreement
Bank business model and issues, recommendations on the number of
organisation and attended benefits determined
• Identification of pain points classified on the basis of 6 recommendations‟ themes
• Identification of necessary axes: and related work streams &
follow-up analysis e.g. 1. Loans operational
review of customers‟ 2. Plastic cards recommendations
accounts, loan origination, 3. Customer accounts
plastic cards processes; 4. Cash management
skills matrix; prioritisation 5. Organization
correlation etc. 6. IT Processes
• Process flows
formalisation and review


Table of content


2 6
Efficiency





Mission statements of a sound Organisation

Workstreams

• Build strong organization and governance to support business activities and
Organisational contribute to the objectives of risk reduction, process efficiency improvement and
review control environment set up

Organisation Competency • Give human resources the proper tools to develop in order to support activities
& Human building & effectively and contribute to grow business
Capital sharing

• Change mentality and push a culture of :
Process & • Ethics
Control • Control
ownership • Efficiency
• Risk

Source: Kapital Bank, interviews, Deloitte analysis and best practices review

REMINDER
Recommendations for Organisation & Human
Capital can potentially lead to 15 FTEs savings and significant
soft benefits

Workstreams Summary of key recommendations Potential savings
• Creation of Head of Markets position and function integrating marketing
department in charge of branch and product performance
• Creation of a Risk and Compliance department and CRO position
• Creation of a COO function (Chief Operating Officer) responsible for all
Organisational back-office activities • 15 FTEs identified
review • Reallocation of “Control and Work with Structural Units” activities to
original owners (e.g. compliance, human resources, etc.)
• Integration of strategic planning division within budget preparation
division in Financial Management department
• Integration of IT Security under CRO in Risk Management department

Organisation & • Professionalize trainings through training programmes (both
Human Capital technical, e.g. FlexCube, and soft skills, e.g. English courses),
Competency welcome onboard package and career development plan set up
building & sharing • Identification of High Potentials within the Bank and retention
programme
• Set up a mobile training workforce for remote regions • No hard savings
identified
• Clear allocation of responsibilities and ownership through defined
governance
Process & Control • Alignment all procedures with processes
ownership • Identification of KPIs to monitor performance and procedure
complance
• Increase awareness of staff for controls and risks


Recommendations to improve process efficiency can
potentially lead to significant risk reduction and 34 FTEs
savings
Workstreams Summary of key recommendations Potential savings

• Define pre-determined settings and mandatory fields for all products
and restrict modification possibilities (i.e. commission rates, interest
rates, repayment schemes, collateral requirements, start/end date, • No hard savings can be
Setup allowance) quantified
modification • Enable mandatory 2nd level of authorization embedded in system for
prolongation of loans, loan status, cash reception, rate modifications
and in Kapkart
• Automate payments for loans (direct debit) • 12 FTEs (direct debit)
• Centralization of client register, implementation of data warehouse to
Technology

• 3 FTEs (reporting in
develop reporting capabilities and improve monitoring through
dashboard on business activities based on centralized processes IT), 1.5 mln (loans)
Interfacing
• Automate reconciliation capabilities between Kapkart and Flexcube • 3 FTEs
by enhancing interfacing (e.g. GL account postings, settlement and
Process interbranch settlement, movements, positions, etc.)
efficiency • Automate all loan and deposit contracts generated by configuration • 12 FTEs (direct debit)
of reporting module 14 FTEs (loans), 2
• Implement workflow management system and document
Module FTEs (deposits)
management system to better monitor interactions between Head
optimization
Office and branches
• Enable cash and teller module to better monitor and automate cash • 4 bln AZN turnover
management process

• Define and harmonize risk and performance criteria within the bank • 68% NPL (65 mln AZN)
policy and impose to branches. Align branch and staff incentives with
credit book performance
Risk control
• Implement a procedure for setup and maintenance of user profiles
improvement
and access rights
• Implement encrypted or automated communication flow for plastic • 4 bln AZN turnover
card data

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2 6
Efficiency





We have identified 607 FTEs potential savings (37% of total) by combining
BAKU –
analysis on performance and branch current structure A
ABSHERON
OTHER
I. II. B ECONOMIC
REGIONS
ANALYSE HEADCOUNT REQUIREMENTS
ANALYSE HEADCOUNT REQUIREMENTS REORGANIZE STRUCTURE OF
PER BRANCH
PER BRANCH BRANCHES

• We have identified best performing branches • Based on option selected by Kapital Bank:
based on staff workload and capacity to A
perform functional responsibilities
Identification of branches to transform into
units
• We distributed results of top performing
branches for all in the region (Baku-Absheron Identify possible branches to be transformed
and other economic regions ) into operational units based on performance
indicators (e.g. loan portfolio volume and
• We estimated the required number of staff for: performance, deposit portfolio, commission
income and expenses) and geographical
Description of density and align commercial and sales
approach  Credit specialists
 Accounting staff messaging and strategy
 Customer servicing staff
 Cash desk specialists B
 Deputy heads and secretaries CORPORATE vs. RETAIL
Based on share of corporate loans in branch
portfolio identify regional centers for corporate
loans.
Ensure existence of center for corporate loans
in each economic region of Azerbaijan.
Current
FTEs

A 276 A 17 branches; 8 units 1,672
69

Savings • 8 branches in 7 regions as regional TOTAL
identified B 262 B 0 centers for corporate loans Expected
• 56 retail profile branches savings
Only split of
activities
performed
TOTAL 538 TOTAL 69 607


Table of content


2 6
Efficiency





Dashboard, IT stream - 13/06/2012

Overall status: GREEN Project
Tracking
Indicator*
Project on target so far – Main achievements:
• All interviews completed (15 people) 100%
• All the processes in the scope of the mandate have been discussed
(22 processes), mapped and benchmarked % completion
of overall
• Gaps identified and grouped in 2 dimensions - IT operations and IT project effort
governance and management.
50%
Next steps / Current Priorities
• Prioritize and analyze identified gaps. Development of SOD matrix.
• Develop recommendations and implementation roadmap for identified gaps

Decisions to be taken Due Date Owner

Selection of options on organizational structure 20 June 2012 Deloitte & Pasha

Key risks and issues Resolution Owner
• No risk or issues identified

Main achievements up to date
Interviews sessions are achieved Review of FlexCube, Tranzware (Processing) and SWIFT applications
IT policies, organization, budgeting, planning process are analyzed Performed IT Maturity Assessment based on Deloitte proprietary tool
Information security review (running services, file permissions, patch
management, database administration, firewall configuration,
password settings, antivirus settings, physical security)

Tasks behind schedule * Measure of the Owner
% of completion of activities due atDue date
the time of publication of the dashboard.
Rev. date


Key themes identified for next steps are the result of 74 issues
observed Average maturity level of IT processes is 1.36 out of 5, that is
below industry average of 3

Themes Work streams Summary of highlights
1
A Organization structure does not reflect current job responsibilities of IT Staff
IT
B There is no systematic approach on development of IT Organization Structure
Organization
1 and Capacity, C Segregation of duties between IT and IS division is not clearly defined
Budgeting D There is no common approach on IT budgeting development and control
IT Governance and Planning
& Management E Prioritization of IT expenditures is not based on cost benefit analysis

A Only 6 out of 37 implemented IT projects were approved by the IT
IT Project Committee
2
Management
B Partial utilization of IT projects by business

2
A Due to technological complexity 53% of IT employees time is spent on
support and maintenance activities
Support &
1 B Configuration management is performed on ad hoc basis
Maintenance
C Existing infrastructure has significant spare capacity

IT Operations Application A Functionality of Core Banking application is underutilized
2
architecture B Business requests and technical specifications are not formalized.

A IT infrastructure is prone to security vulnerabilities
Information
3
Security B Weak security management of critical applications & key infrastructure


We are proposing 2 different scenarios on future organizational
structure of IT
Separate processing & BI and outsourced Processing & BI within IT and internal
“As Is” organizational structure
development (To be option 1) development (To be option 2)

• Segregation of IT and IS functions • Better SoD between IT and Processing • Processing as a separate unit within IT
+ • Quick response time to issue resolution • Lower SoD risks due to outsourcing of • BA as a separate unit within IT
• Relatively low number of FTEs development • Shorter implementation time than
• Separate BA unit provides better translation Option 1
of business needs to IT and vice versa • Separate PMO provides more efficient
• Separate PMO provides more efficient project management capacity
project management capacity

- • Development and operations are
performed by the same employees
• Higher personnel expenses due to
introduction of new units
• Higher risks than in Option 1 due to
keeping processing and development
• Responsibilities are not assigned in • Higher development costs due to under IT
accordance with the positions held outsourcing • Less influential BA functionality
• Organizational structure is based on • Increased response time on issue
historical development rather than resolution
functional principles • Less knowledge on application
• High reliance on key individuals development due to outsourcing
• Lack of project management and strategy • Longer implementation time than Option 2
development capacity
Source: Kapital Bank; interviews & Deloitte analysis

Table of content


2 6
Efficiency





Project status and next steps
Next steps:

I. KPI definition for key activities
II. Definition of roadmap based on following prioritization
criteria:
• FTE savings
Should be validated by
• Reduction of risk Kapital Bank
• Effort required

III. Finalised detailed analysis for IT stream

Roadmap IT Analysis


Process Efficiency and Organization Review

Take the right steps - A pragmatic approach
for pragmatic results .
Appendices

June 13th 2012
Advisory & Consulting Services

Appendix
1. Detailed project timeline and
deliverables
2. Organisational Review
3. Detailed Process Analysis
4. Branch Network Analysis
5. IT Stream: Key Findings
6. Universe of Recommendations

© 2012 Deloitte Tax & Consulting S.à r.l.

Appendix 1 – Detailed project
timeline and deliverables

© 2012 Deloitte Tax & Consulting S.à r.l..

Time spent on Task

Project timeline – where we stand (1/2) Deliverables
Elapsed time

April May June

26/03 02/04 09/04 16/04 23/04 30/04 07/05 14/05 21/05 28/05 04/06 11/06 18/06 25/06

Kick-off meeting 1. Current Operating Model
Interviews

2. Process Catalogue
3. Process maps
Management interviews 4. Automation Opportunities
5. Intermediary Recommendation report
6. KPIs
Operational teams’ leaders interviews 7. TOM (roadmap)

STREAM 1 – Processes Review
• In-depth analysis of key business activities at KB:
customer accounts, loans, cash, plastic cards,
management reporting
• Determine how to use Flexcube at its full capacity
• Gaps analysis
• Possible options & scenarios development and
validation
• Design of TOM
• Implementation planning & communication &
sign-off

STREAM 2 – Organizational Review
Activities

Step 1-”As-Is” Description
• Functions, Roles and Responsibilities 1. Current Organizational Map
2. Highlight Risks and overlap
• Decision making structure and reporting lines functions in current org. map
• Management Reportin tools and KPIs 3. Recommendation report (including
• High level business flows recommendations to ensure
business agility)
• Staff allocation/usage 4. KPIs
5. Roadmap
Step 2- Optimization
• Overlaps and duplication of functions
• Bottlenecks and key man dependencies
• Risk and control issues/opportunities
• Centralization vs. Decentralization work allocation
• Staff workload rebalancing
• Timeliness of service delivery
• Timeliness of new service launch
• Staff skillset requirements and training needs

20 Kapital Bank Process Efficiency and Organization Review Weekly status progress meeting © 2012 Deloitte Tax & Consulting S.à r.l.

Time spent on Task

Project timeline – where we stand (2/2) Deliverables
Elapsed time

April May June

26/03 02/04 09/04 16/04 23/04 30/04 07/05 14/05 21/05 28/05 04/06 11/06 18/06 25/06

STREAM 3 – Design of Target Operating
Model
• Activities (product sold and service offered)
1. Analysis on branch network
• Customer segments and client experience and profile
(consistency throughout the network) 2. Recommendation Report
• Key operational processes and technology used 3. KPIs
4. Implementation Roadmap
• Geographic dispersion
• Reporting tools and financial performance
• Comparative positioning versus other channels
Activities

(internet, mobile, call center, ATM)
• Branch performance and overlap report
• Automation opportunities within branches
• Opportunities to increase the added value of the
branch network

STREAM 4 – Design of Policies and
Procedures
• IT/Business alignment capabilities
• IT management and governance
• IT performance metrics
• Project management
1. Current IT Organization
2. Control Environment
assessment
Weekly status progress meeting 3. IT capabilities and agility
assessment
4. Project management and
prioritization
5. KPIs
6. Implementation Roadmap

Note: Capacity Planning and skillset assessment have not been performed as not applicable to the overall organization (i.e. over-capacity has been identified)


Appendix 2 – Organizational
Review

© 2012 Deloitte Tax & Consulting S.à r.l..

Organisational Review –
Detailed analysis

© 2012 Deloitte Tax & Consulting S.à r.l.

Today’s organization can be improved to reduce risks, boost
efficiency and support long term actions
Review of Committees Review of activities and
Review of management
composition and key controls performed
board composition This review of organizational structure
responsibilities needs to be validated by management
team

Key actions to be performed
• Review of Management Board
Composition based on requirements and
best practices
• Review Committees composition and key
responsibilities
• Review activities and controls performed
in Treasury and Cash Management
departments
• Review activities and avoid tasks
duplication within Financial Management,
Marketing & Strategic Planning and Control
and Work with Structural Units departments
• Review Front Office functions and
representation in organizational chart in
order to add transparency
• Review of risk and compliance activities
in order to comply with regulatory
requirements

Identification of Review of activities
Review Front Office
compliance activities performed and avoid
functions and add
within the organization duplication
transparency


1.1 A Review of Compliance activities performed in Risk
Management Department

Time split per activity, FTEs
1 FTE in Work with Structural Units Department
is also performing compliance task which is
preparing reports for corresponding banks
Total
7
Key observations
Procedures review
activities 1 • Risk Management Department is currently in charge of
all compliance activities
Credit file review & • 1 FTE is dedicated to Compliance function (AML) and
Credit Committee does not report to head of Risk but directly to the
attendance 1
Management Board
• The same team is in charge of monitoring procedures
Compliance activities and checking regulatory compliance  no respect of
1 independence principles

Reporting activities Key Recommendations
1

• Compliance activities should include AML, Fraud
Risk control activities Management and Compliance to Ethics Principles as
1 well
• Employees awareness regarding compliance matters
Deputy Director/ should be increased thanks to specialized trainings
Director 2
• Compliance function must be supervised by Risk
Management Department before reporting to the
Management Board (Deputy Chairman)


Typical changes based on best
1.1 A We propose five main changes within the current practices
Specific changes based on Kapital
B Bank structure
organizational chart

Proposition of organizational structure
Key changes

1 • Transparency and clear representation
of Front and Back office functions
thanks to the creation of a new
department dedicated to markets

2 • Regroup of financial and strategic
planning functions under the same
department and division named
budget/strategic planning
3 • Creation of a Risk and Compliance
department based on the existing
department
4 • Creation of the Chief Operating Officer
(COO) responsible of all back office
operations
5 • Absorption of “Control and Work with
Structural Units” activities to other
divisions within the organization:
- Problematic loans to legal department
- Bank supervision to IT, Human
Resources and Risk management
- Other activities to markets department

Important note:
IT Security division has been incorporated in Risk & Compliance Department as a proposition based
on Deloitte experience
Allocation of certain activities should be submitted to Kapital Bank approval (such as
compliance, problematic loans and IT Security)


1.1 B Typical organizational chart in Retail Banking illustrates three
changes identified in the current organizational chart of
Kapital Bank
Organizational structure of Banque de Détail et des Entreprises à Luxembourg (BGL BNP Paribas)
3
Risk & Compliance

Key observations
Compliance function is performed at a group
level and is in charge of all subject matters
linked to regulatory compliance

Key observations
Existence of Chief Operating Office
responsible for operations within the Bank

4

1

Key observations
Representation of Front Office activities (retail and corporate) within the
organization – Those departments are in charge of managing and
developing clients market and of the visibility of the Bank


1.1 B Review of performing reporting activities shows potential
savings of 3 FTEs within the IT Department

Number of developed reports (2011 – Q1 2012) Man days required to develop reports (2011 – Q1 2012)

Key recommendations
Total 265 Total 1,325

• Develop formal requests
Number of Man days per system (requisition form)
88 88 88 441 441 440 different for a change request
reports per year year
and a new demand

Assuming that the development of 1 report To develop 265 reports, maximum 1,325 man days should • Set up priorities of business
should take maximum 5 man days, the minimum be needed, which is represent 441 man days per year and demands based on business
of developed reports per year should be of 88 2.2 FTEs dedicated to development opinion AND IT Committee
decision

• Rationalize number of
Key observations reports existing in the system
(compare to reports used by
• Total number of reports (265) represent reports • There are currently 5 FTEs full time dedicated to develop business)
currently existing in the system. Some reports reports for business use while, based on the time required to
are duplicated and used to compare accuracy of develop a report, 2 FTEs should be enough • Involve business in IT
new ones (“legacy reports”) developments by adding an
• There is no formal request procedure (email or  3 FTEs could be allocated to other activities
“IT representative” in
face-to-face) and no priority level between • There is no business analyst to translate business business services
business requests requirements into technological request
• New demands and change requests are not • Reduce FTEs dedicated to
considered separately reporting based on the
• Business is not using totality of developed previous observations (Max 2
reports (no tracking) FTEs)


1.1 B We have identified a potential savings of 8 FTEs in the Head
office through the review of 5 departments or divisions

Description of actions Current # of FTEs Potential savings

1
• Review of performing reporting activities 5 FTEs 3 FTEs
IT Department
• Comparison to best practices

2
• Review of activities performed 8 FTEs 2 FTEs
Human Resources
Department • Comparison to Azeri and European banks

3 Drivers: 14 FTEs
• Review of administrative staff (drivers and cleaning staff) 23 k AZN
Support functions
• Transformation of contracts into sub-contract agreements Cleaning staff: 9 FTEs

4 • Review of activities performed in Marketing & Strategic
Planning Department
Strategic Planning 3 FTEs 3 FTEs
• Reallocation of Strategic Planning activities into Budget
preparation division in Financial Management department

5 • Review of activities performed
Control and Work 15 FTEs 10 FTEs
with Structural Units • Reassign activities to original owners (e.g.
compliance, human resources, legal, etc.)


1.1 B In the current set up of activities performed by Human
Resources Department, 2 FTEs could potentially be saved
AZERBAIJAN LUXEMBOURG

Human Resources key capabilities Kapital Bank Central Bank BGL BNP Paribas Key observations
• HR Administration • Activities dedicated to employee rewards
- Perform employee data and salary administration
   and satisfaction are not performed within
the bank  No reward system to retain
- Perform & administer employee benefits N/A  talent
- Manage payroll
   • No existing proactive system to anticipate
- Monitor employee health and safety    job vacancy and facilitate employee
• HR Management activities integration

- Plan and manage employee resources    • Top-Down decisional & communicative

- Manage vacancy and employee integration  approach

- Manage employee separation process    • With less HR staff, proportionally
speaking, Central Bank performs two times
- Manage employee rewards system N/A  me activities that Kapital Bank department
- Manage career development process N/A 
- Manage employee satisfaction 
- Manage internal policies & procedures    Key recommendations

- Measure employee performance   • Reduce number of FTEs in HR department
to 6 FTEs (compared to best practices)
• Recruitment & Mobility
- Manage recruitment (internships & events)   • Setting-up a recruitment system to attract
and select people
• Learning
• Develop Induction Programs to facilitate
- Manage induction programs
  employees integration
- Develop and train workforce    • Support high potentials and skills
development through career development
# of FTEs in HR department 8 14 - path
TOTAL # of FTEs 270 612 -
• Develop bottom – up approach to retain
Ratio FTEs per HR FTE 33.75 43.71 FSI Average talent in the Bank (employee satisfaction
Ratio: 90 FTEs surveys, rewards system)


1.1 B 23 K AZN annual potential savings could be generated by
transforming contracts of support staff into sub-contract
agreements
Total distribution of administrative staff in Head Office (56 FTEs)
Key observations

TO… 56 100% • There is no clear attribution of staff among divisions (repartition
could be different in Head Office and branches) – For example:
Dir… 2 4% cleaning staff is classified under supply and services in Head
He… 4 7% Office and under building services in branches

As… 6 11% Recommendations
Ch… 1 2%
• Define a clear and harmonized repartition of staff among
En… 2 4% divisions
Le… 3 5%
2%
Key observations
Ch… 1

Sp… 2 4% • Transportation division represents 25 % of total staff in
Administrative department (14 FTEs)
Off… 2 4%
Su… 1 2% • Cleaning staff represents 16 % of total staff (9 FTEs)

Te… 4 7%
Recommendations
El… 3 5%
4% • Transformation of support staff contracts into sub-contract
Ge… 2
agreements
Cl… 9 16% Staff involved # FTEs Salary
Dri… 14 25% • Drivers 14 500
• Cleaning staff 9 400
Potential social charges reduction per year:
• Drivers:15,120 AZN (6,000*14*18% )
= 22,896 AZN
• Cleaning staff: 7,776 AZN (4,800*9*18%)


1.1 B Contract amendments for the whole organization can lead to
274k AZN saving in social charges

Current number of FTEs Current FTEs

Total 1672 • Contract social charges comparison
Branch director 97 (for monthly salary up to 2,000 AZN)
Deputy director 26 Sub- Potential
Contract
contract saving
Head accountant 99
Employee part 17% 4%
Deputy head acc. 34
Leading… 35 Employer fee 20% to 22% 5%
Controller 60
Accountant 53
TOTAL CHARGE ~37% 9% 26%

Head of division 18
Senior specialist 31
Leading specialist 104
Specialist 245
Operator 84

Head ofdivision 35
Senior specialist 23 Contract conditions review
Leading specialist 59
7
Specialist 89 • To subcontract
192 FTEs  drivers (99+10)
Senior cashier 91
 office cleaners (83)
Cashier 140
Operator 14
~274k AZN • Subcontract conditions will
social alow to benefit from social
Senior specialist 21
charges charges (~26%*):
Secretary 26
savings
Cash collector 42
Annual Salary*No.of Employees*26%
Driver-collector 99
Cleaner 83 99+83

Other 64 10

32 Kapital Bank Process Efficiency and Organization Review Drivers © 2012 Deloitte Tax & Consulting S.à r.l.
Source: Kapital Bank data as of end of March 2012, Deloitte Analysis

1.1 B Reallocation of Strategic Planning activities into Budget
Preparation Division and Marketing Division could
generate 3 FTE savings Key observations
Strategic Planning Budget Preparation & Control Marketing
• Overlap of activities:
Development of strategic plan &
• Setting-up and develop strategic • Participate in development of • Multi channel analysis budget forecast are performed by 2
goals strategic plan different divisions
• Measure product performance
• Manage financial reports forecast • Manage and discuss budget • Follow up of action plans is not
Current forecast
• Manage budget forecast & performed in strategic planning
activities
allocation • Manage budget allocation to division

• Provide macro & micro
branches • There is no proper segmentation
and targeting strategy
environment monitoring • Performance monitoring
• No rationalization of products and
• Define & develop market approach • Control implementation of budget • Conceive & apply commercial services offering
for segments/markets offers • There is no functional support to
• Monitor and analyze the costs of
branches regarding deployment of
Other • Develop Marketing plan the Bank and the financial aspects • Develop Products & Services
marketing actions
best of activities offering
• Manage action plans in
practice • There is no process in place
consultation with management • Propose tool & methods to
activities regarding “voice of consumer”
answer client‟ needs
• Implementation of sales events
• 3 FTEs in Strategic Planning
• Manage customer relationships division are mostly dedicated to
redundant activities (cf. budget
# of FTEs 3 3 4 preparation)

Key recommendations

• Integrate strategic planning functions regarding development of strategic goals and budget forecast to budget preparation division
• Review of activities currently performed and what should be performed according to best practices and activities description provided by the Bank
• Marketing functions will be integrated under the responsibility of a “chief market specialist”


1.1 B Organizational representation and new roles of Marketing
Department and Budget & Strategic Planning Division will
be presented as following: Proposed Organisational Chart

Marketing Department (Front Office)
4 FTEs under the responsibility of “chief market
specialist”
• Define strategic goals
• Develop marketing plan according to
targeting approach
• Manage action plans in consultation with
management
• Monitor and follow-up of branches
• Manage delivery channels
• Develop Products & Services
• Market Products & Services
• Manage customer relationships
Budget/Strategic Planning Division
• Propose recurring reporting of all needs
identified to the head office (e.g. IT 3 FTEs under the responsibility of “chief financial officer”
developments, recruitments, vacations…)
Key activities:
• Participate in development of strategic plan
• Manage and discuss budget forecast
• Manage budget allocation to branches
• Monitor and analyze the costs of the Bank and the financial aspects
of activities
• Performance monitoring ((establish indicators of financial and non
financial performance through reporting tools)

1.1 B Reallocation of activities of Control and Work with
Structural Units Department could potentially generate 10
FTEs savings

Analysis, monitoring and Key observations
Working with structural units control of problematic loans Bank supervision • Department is currently performing
activities that are typically assigned
• Market related activities • Credit analysis • IT Security activities to other owners leading to a lack of
clear ownership of roles and
Performed

• Monitoring of problematic loans • Human Resources activities
Activities

responsibilities regarding key
• Determine best solution in order • Compliance activities: activities within the Bank
to ensure a reimbursement of preparing reports for
the credit to the Bank corresponding banks • 15 FTEs (14 + deputy director) are
performing “redundant”
activities, only 5 FTEs could be
# of FTEs 5 5 4 reallocated:
• 2 FTEs to Marketing under Head
of Markets
• 3 FTEs in Problematic Loans
division under Legal department
or directly under CRO
supervision (to be validated by
Kapital Bank)
Reallocation of activities

Key recommendations
• Reassign activities of control and
work with structural units department
to corresponding divisions within the
•Reallocation into markets •Reallocation into Legal •Reallocation into Human
organization
department (2FTEs) department or as a separate Resources and Risk
•Report to Chief Operational
division under CRO (3FTEs) departments as well as in IT • Setting up a clear process ownership
Security division for those activities that will be
Officer •Report to Chief Compliance
Officer •Report correspondently to reallocated to other departments
Chief Executive Officer, Chief
Risk Officer and Chief
Information Officer

1.1 C 26% of current workforce at the Head Office correspond to
management functions within departments
% of total number
of staff
Total number of FTEs in Head Office by Functions*

TOTAL* 270 100%
Director 14

Deputy Director 10 26%
Key observations
Head of Division 46
• High percentage of management
Chief Specialist 41
staff:
Lead Specialist 39 26% of employees are part of
management functions inside
Specialist 33 divisions (besides existing
Chief Engineer
management positions in the Bank)
6

Lead Engineer 7 • Mismatch between positions and
actual activities:
Engineer/ Programmer 6 Positions are created in order to
74% retain employees and lead to a
Senior Lawyer 2
mismatch of positions and activities
Lead Lawyer 1 performed
Chief Cashier 1

Cashier 7

Lead Cash Collector 6

Cash Collector 7

Admin. & tech. support 44

* Excluding senior management executives


process efficiency review

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