FEatured Case study
Transforming a Target Operating Model Delivers $18M In Annual Benefits
Overcoming Lending Roadblocks: A Quest for Efficiency and Growth
A regional bank faced inefficiencies in its commercial lending operations, particularly in Business Banking and Commercial Banking. Fragmented processes, manual workflows, and a lack of scalability hindered growth and acquisition integration. Pre-opportunity efforts were time-consuming, loan boarding was manual, and there was limited visibility into pipeline performance. The bank needed a cohesive strategy to align roles, streamline processes, and leverage technology to boost revenue, reduce costs, and enhance market competitiveness while maintaining high-performing client relationships.
Solutions
✓ Internal Interviews
✓ Strength Identification
✓ Weakness Assessment
The Approach
The client partnered with The Abaco Group to employ a structured, collaborative approach to address the bank’s challenges, setting the foundation for transformative change.
Current State Assessment
- Conducted 50 interviews across Commercial & Industrial (C&I), Commercial Real Estate (CRE), Business Banking, and Special Assets groups in multiple Ohio regions.
- Identified strengths (e.g., centralized underwriting, team-based front office) and weaknesses (e.g., manual loan boarding, cumbersome pre-opportunity processes).
Solutions
✓ Strategy Articulation Map
✓ Standardized Roles
✓ Improved Performance Metrics
Strategy Articulation
- Facilitated a 3-hour working session with the Steering Committee to develop a Strategy Articulation Map (SAM), aligning strategic goals with operational solutions.
- Established a foundation for growth through standardized roles, improved market segmentation, and performance metrics tied to profitability and risk.
Solutions
✓ Standardized Processes
✓ Enhanced Sales Training
✓ Automated Workflows
Target Operating Model Development
- Held three 5-hour brainstorm sessions (Front Office, Middle/Back Office, Portfolio Risk Management) and two 4-hour challenge sessions with over 30 participants to design the TOM.
- Focused on standardizing processes, centralizing Business Banking underwriting, enhancing sales training, and automating workflows to support scalability and efficiency.
Solutions
✓ Process Flows
✓ Defined Clear Roles and Practices
✓ Reduced Regional Variations
Process Mapping
- Conducted two 6-hour process mapping sessions to create Level 2 process flows with role narratives for Commercial and Business Banking.
- Defined clear roles and standardized practices to reduce regional variations and improve handoffs between sales and credit teams.
Solutions
✓ Detailed Workstreams
✓ Re-evaluated Total Benefits
Roadmap and Business Case
- Developed a high-level roadmap prioritizing Business Banking and Middle Office for Phase 2, with detailed workstreams for detailed design, pilot, and implementation.
- Re-evaluated the business case, projecting $51.6 million in total benefits over five years ($40.8 million in revenue enhancement, $10.9 million in expense savings) against $2.85 million in costs.
Solutions
✓ Defined Deliverables
✓ Refined Resource Plan
✓ Proposed Program Management Structure
Stakeholder Engagement and Validation
- Reviewed deliverables with the Steering Committee and stakeholders, incorporating feedback to refine the roadmap and resource plan.
- Proposed a program management structure with assigned leads for workstreams (e.g., Business Banking Front Office, Workflow) to ensure Phase 2 success.
The Results
By partnering with The Abaco Group, the firm achieved remarkable outcomes:
01
Millions in Benefits
Refined commercial lending operating model resulting in $18 million in annual net benefits.
02
Efficiency and Growth
Standardized processes, enhanced sales culture, centralized underwriting, and leveraged technology.
03
Dedicated Program Structure
Outlined 18-month rollout to ensure disciplined execution.
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