featured case study
Delivering $18M in Annual Benefits by Transforming a Target Operating Model
Standardize Processes and Leverage Technology
The Abaco Group successfully guided a regional bank to refine its commercial lending operating model, delivering a Target Operating Model (TOM) and a high-level roadmap resulting in $18 million in annual net benefits. The recommendations included standardizing processes, enhancing sales culture, centralizing underwriting, and leveraging technology like Cyence/ExpressOS to drive efficiency and growth. Phase 2 implementation, focusing on Business Banking and Middle Office, was outlined for an 18-month rollout, with a dedicated program management structure to ensure disciplined execution.
the challenge
Overcoming Lending Roadblocks: A Quest for Efficiency and Growth
The 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.
The Approach
The Abaco Group employed a structured, collaborative approach to address the
bank’s challenges during Phase 1, setting the foundation for transformative change.
1
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).
2
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.
3
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.
4
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.
5
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.
6
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.
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