Retail Banking in CEE: Exploiting the Potential of ... - Roland Berger

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SUMMARY OF KEY FINDINGS
SUMMARY OF KEY FINDINGS
From CEE banks' perspective,
micros are attractive because they
represent growth potential in a
stagnating market
OVERVIEW
The financial market crisis rearranged the priorities of CEE banks within a very short
period of time. After the stabilization of bad loan portfolios, the number-one priority of
banks is now to find break-through segments with a realistic growth perspective – even
if we do not talk about annual market growth potentials of more than 10% anymore.
Certainly the real driver is lending. Therefore banks focus on segments that have a
relatively low loan penetration and show lending potential with reasonable risk.
The micro segment meets the above described criteria. Thus it is definitely planned to
become one of most CEE banks' focus areas in the upcoming three to four years.
However, those banks still need to elaborate and detail the respective segment strategy
and especially its impact, e.g. on sales and service models or risk modeling.
CEE banks' challenges and
questions can be grouped into three
topics: strategy, risk management,
cross-segment offering
CHALLENGES
The micro segment challenges identified by CEE banks are the large number of potential
clients and their heterogeneousness. The banks' uncertainty is reasonably high to
avoid NPL rate growth or a too high cost level caused by over-servicing. Generating
more profit from this segment requires the understanding of the main micro-specific
cost and revenue drivers. As a result of the study and of Roland Berger's project experience,
three key success factors can be highlighted:
1. Detailed micro strategy aligned with all relevant internal departments to guarantee
the highest operational efficiency with focus on two major topics:
> Segmentation – grouping micros into homogeneous sub-segments, identifying
target groups and their specialties
> Service model – defining the level of service and organizational setup required
for cost-efficiently selling to micros and servicing them
2. Tailor-made risk management considering all micro specialties via elaborating a
sub-segment specific, efficient scoring model to avoid NPL growth and to speed up
"time to yes" process
3. Enhancement of cross-segment offering by increasing sales and service efficiency
of advisors and sales boost by utilizing best practices of joint private and business
need services