Alior Bank - case study

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Presentation prepared for a conference Retail Banking in Europe, London 30-31 March 2009 and held by Comarch Consulting Director - Slawomir Gierek.

Published in: Economy & Finance, Business

Alior Bank - case study

  1. 1. Sławomir Gierek Comarch Alior Bank - case study www.comarch.pl
  2. 2. Agenda <ul><li>What is Alior Bank? </li></ul><ul><li>How does technology makes Alior Bank unique? </li></ul><ul><li>Focus on front end excellence </li></ul><ul><li>Results after four months of operation </li></ul><ul><li>A few words about Comarch </li></ul>
  3. 3. What is Alior Bank? <ul><li>Key facts: </li></ul><ul><ul><li>the biggest banking start-up in European banking in the last 30 years </li></ul></ul><ul><ul><li>funded by the Carlo Tassara Group </li></ul></ul><ul><ul><li>equity injection of € 400 M paid in full </li></ul></ul><ul><ul><li>formal creation of Alior Bank SA in April 2008 (after regulatory approval) </li></ul></ul>
  4. 4. What is Alior Bank? <ul><li>The goal: to create a valuable bank 2012 figures: </li></ul><ul><ul><li>Sizable </li></ul></ul><ul><ul><ul><li>captured market share of 2% to 4% depending on the client segment </li></ul></ul></ul><ul><ul><ul><li>920 K clients: 200 branches, 8 business centers, 400 agencies </li></ul></ul></ul><ul><ul><li>Profitable </li></ul></ul><ul><ul><ul><li>Revenues € 330 M </li></ul></ul></ul><ul><ul><ul><li>Net profit € 100 M (2012) </li></ul></ul></ul><ul><ul><ul><li>Cost/Income 54%, ROE 25% </li></ul></ul></ul><ul><ul><li>Entrepreneurial </li></ul></ul><ul><ul><ul><li>Net profit at bank level in 2011-2012, fourth year after launch </li></ul></ul></ul><ul><ul><ul><li>Break-even at branch level: 14 months after branch start </li></ul></ul></ul>
  5. 5. Three pillars of the Alior Bank strategy <ul><li>Best quality, motivated staff </li></ul><ul><ul><li>Excellent reputation at the local market level </li></ul></ul><ul><ul><li>Strong track record </li></ul></ul><ul><ul><li>Strong results orientation </li></ul></ul><ul><ul><li>Entrepreneurial reward/bonus structure </li></ul></ul><ul><li>3. Lean, centralized organization with modern IT/operations solutions </li></ul><ul><ul><li>IT systems at a fraction of the previous costs (1/3) </li></ul></ul><ul><ul><li>Full centralization of operations </li></ul></ul><ul><ul><li>Automation allowing for lean organization structures (75% of Alior bank staff is facing the client) </li></ul></ul><ul><li>2. Unique client proposition </li></ul><ul><ul><li>Attacking mid market (companies and individuals) with upper shelf products </li></ul></ul><ul><ul><li>Fast decision making and time-to-market </li></ul></ul><ul><ul><li>Innovation </li></ul></ul><ul><ul><li>Brand </li></ul></ul>
  6. 6. High quality staff <ul><li>Experienced and professional </li></ul><ul><ul><li>Average banking experience of 8 years </li></ul></ul><ul><li>Diverse </li></ul><ul><ul><li>From 23 banking institutions and 5 countries </li></ul></ul><ul><li>With a proven track record </li></ul><ul><ul><li>Many prestigious award winners </li></ul></ul><ul><li>Carefully selected, verified </li></ul><ul><ul><li>31 , 200 candidates </li></ul></ul><ul><ul><li>7 , 000 interviews </li></ul></ul><ul><ul><li>1 , 540 people hired </li></ul></ul><ul><ul><li>No external head hunters used (except for 2 people) </li></ul></ul><ul><li>Carefully and comprehensively trained </li></ul><ul><ul><li>110 , 000 hours of Alior training in 2008 </li></ul></ul>
  7. 7. Unique client proposition (examples) <ul><li>Individuals: </li></ul><ul><ul><li>Current Account with automatic Overnight, free of charge </li></ul></ul><ul><ul><li>ATMs worldwide free of charge </li></ul></ul><ul><ul><li>Independent airline credit card for frequent flyers </li></ul></ul><ul><ul><li>Fully integrated brokerage services available in all branches as well as the Internet </li></ul></ul><ul><li>Companies: </li></ul><ul><ul><li>Several variations of current account packages </li></ul></ul><ul><ul><li>Autodealing </li></ul></ul><ul><ul><li>Full lending offer focused on working capital loans </li></ul></ul><ul><ul><li>Leasing and factoring services (planned) </li></ul></ul>
  8. 8. Centralized IT and operations Agencies Reporting Credit monitoring Front Office Internet Contact Center Payment SWIFT Credit processing Document Workflow Credit bureau Middleware SOA Profile 7.2 IBS / FMS (General ledger and transactional system) Inv/HR Brokerage Treasury Card authorization Scan archive ATM
  9. 9. Efficiency in IT and operations <ul><li>Complete infrastructure built in 12 months </li></ul><ul><li>Number of IT systems reduced by half (100 vs 200) </li></ul><ul><li>High level of technology consistency </li></ul><ul><li>Cost of IT systems at 1/3 of the typical level </li></ul><ul><li>IT staff at 4.5% of the bank’s FTE number (planned for E2009 with 150 branches) vs 7% (benchmark) </li></ul><ul><li>Reduction of paper use by 50% </li></ul><ul><li>Extensive use of outsourcing: cash logistics, card management, document management, mass printing… </li></ul><ul><li>„ Shared infrastructure” SWIFT access </li></ul><ul><li>75% of staff is facing the client </li></ul>
  10. 10. Focus on front end excellence Agencies Reporting Credit monitoring Front Office Internet Contact Center Payment SWIFT Credit processing Document Workflow Credit bureau Middleware SOA Profile 7.2 IBS / FMS (General ledger and transactional system) Inv/HR Brokerage Treasury Card authorization Scan archive ATM
  11. 11. Front Office <ul><li>CAFE platform based ( Comarch Front End ) </li></ul><ul><ul><li>Modern architecture with a portlet based advisor desktop </li></ul></ul><ul><ul><li>Dedicated tools for branch managers and central sales network management </li></ul></ul><ul><ul><li>CRM, customer management and teller functionality combined in a single, browser-based tool </li></ul></ul><ul><ul><li>Central user management through a domain controller and Comarch Access Management </li></ul></ul><ul><li>Innovative use of interactive displays for better communication with clients </li></ul><ul><li>Going green: saving trees by significantly reducing the use of paper </li></ul><ul><li>Fully integrated with Document Management </li></ul><ul><ul><li>application generated barcodes </li></ul></ul><ul><ul><li>images provided by outsourcer </li></ul></ul>Front Office
  12. 12. Contact Center <ul><li>Agents have instant access to data and functionality available in other channels – no synchronization necessary </li></ul><ul><li>Web based application allows for initiating calls and responding to incoming ones </li></ul><ul><li>Seamless integration with recording functionality (Witness) </li></ul><ul><li>Supervisor and manager functionality included </li></ul><ul><li>Support for marketing campaigns – including integration with ACD </li></ul>Contact Center
  13. 13. Credit Processing <ul><li>Maximum automation </li></ul><ul><ul><li>workflow based (simple cash loans in 30 minutes) </li></ul></ul><ul><ul><li>decision making engines </li></ul></ul><ul><ul><li>automatic monitoring and administration </li></ul></ul><ul><li>Maximum centralization of functions </li></ul><ul><ul><li>loan approval </li></ul></ul><ul><ul><ul><li>analyses, policies, score cards </li></ul></ul></ul><ul><ul><ul><li>expert credit committee for non-standard loans </li></ul></ul></ul><ul><ul><li>administration, monitoring and collection </li></ul></ul><ul><ul><ul><li>all functions central/regional </li></ul></ul></ul><ul><ul><li>fraud detection </li></ul></ul><ul><ul><li>credit process improvement and quality assurance </li></ul></ul><ul><ul><li>central on-line archive </li></ul></ul><ul><li>Maximum flexibility and integration: </li></ul><ul><ul><li>process definitions and screens are defined not coded </li></ul></ul><ul><ul><li>printout management (with document templates) </li></ul></ul><ul><ul><li>integration with DMS (barcodes) </li></ul></ul><ul><li>Based on Comarch Credit Process Management </li></ul>Credit Processing
  14. 14. Internet <ul><li>Based on Comarch Internet Banking and Comarch Internet Investments </li></ul><ul><li>Unparalleled in available customizations, yet easy to use and understandable </li></ul><ul><li>Includes a mobile version for web-enabled mobile devices </li></ul><ul><li>March 2009, awarded by Gazeta Bankowa: „The Best Internet Banking System in Poland” </li></ul><ul><li>Corporate and Intranet portals are managed with the Comarch Content Management System </li></ul>Internet
  15. 15. Alior Bank – results after four months <ul><ul><li>more than 100 branches </li></ul></ul><ul><ul><li>more than € 300 M in deposits </li></ul></ul><ul><ul><li>more than € 100 M of credit granted </li></ul></ul><ul><ul><li>more than 100 thousand clients </li></ul></ul><ul><ul><li>more than 2000 brokerage office clients </li></ul></ul><ul><ul><li>more than 200 private banking clients </li></ul></ul>Branches Zielona Góra Poznań Warszawa Wadowice Gdynia Łódź Rumia Sokołów Podl. Łomża Suwałki Kraków Włocławek Wrocław Pruszków Elbląg Koszalin Wołomin Radom Zamość Stalowa Wola Rzeszów Krosno Kielce Olkusz Opole Tarnów Kalisz Zabrze Gliwice Grudziądz Katowice Bielsko-Biała Mysłowice Tychy Dąbrowa G. Płock Wejherowo Mińsk Mazowiecki Słupsk Częstochowa Legnica Lublin Toruń Bydgoszcz Gdańsk Chorzów Leszno Sosnowiec Szczecin Świdnica Gorzów Wielkopolski Olsztyn Ostrołęka Business Centers Białystok Kędzierzyn Koźle Siedlce Wrocław Inowrocław Chełm Piotrków Tryb.
  16. 16. A few words about Comarch <ul><li>International IT software house and integrator, employing ~3500 people with € 160 M in revenue in 2008 </li></ul><ul><li>Active on various markets including: financial services, telecommunications, public sector, ERP software, trade and service providers </li></ul><ul><li>Established in 1993 by current CEO and major shareholder Prof. Janusz Filipiak, listed on the Warsaw Stock Exchange since 1999 </li></ul><ul><li>The ‘ Banking, Insurance & Capital Markets ’ Business Unit delivers solutions to various parts of the financial market </li></ul><ul><li>The banking segment concentrates on front end solutions including: Internet banking and Internet portals, document management, loan origination, sales network management and CRM </li></ul>
  17. 17. Comarch SA: [email_address] www.finance.comarch.com Alior Bank: www.aliorbank.pl Thank you! www.comarch.pl

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