cvp final 26.08.22 (1).docx

Commercial Bank of Ethiopia
CVP wholesale customers Page - 0 -
CVP Guideline for wholesale
Customers
July, 2022
COMMERCIAL BANK OF ETHIOPIA

Table of Content
Contents
1. INTRODUCTION ....................................................................................................................................................- 4 -
1.1. Back Ground .................................................................................................................................................- 4 -
1.2. Objective...............................................................................................................................................................- 5 -
1.2.1. General objectives....................................................................................................................................- 5 -
1.2.2. Specific objectives ....................................................................................................................................- 5 -
1.3. SCOPE ...................................................................................................................................................................- 5 -
1.4. Definitions of Terms ..............................................................................................................................................- 5 -
2. Major Roles and Responsibilities: ............................................................................................................................- 7 -
2.1. Board of directors:................................................................................................................................................- 7 -
2.2. The President:........................................................................................................................................................- 7 -
2.3. Wholesale Banking Division: ................................................................................................................................- 8 -
2.4. Credit Division: ......................................................................................................................................................- 9 -
2.5. International Banking (IB) Division:.......................................................................................................................- 9 -
2.6. Retail and Branch Banking Division:......................................................................................................................- 9 -
2.7. Digital Banking division: ........................................................................................................................................- 9 -
2.8. Customer Experience division:............................................................................................................................- 10 -
3. BASIC ELEMENTS OF CUSTOMER VALUE PROPOSTIONS (CVP):.............................................................................- 10 -
3.1. Product ...............................................................................................................................................................- 10 -
3.2. Pricing:................................................................................................................................................................- 11 -
3.3. SERVICEDELIVERY AND DISTRIBUTION CHANNELS ............................................................................................- 11 -
3.3.1. Client service team (CST)....................................................................................................................- 12 -
3.3.2. RM led model: ....................................................................................................................................- 12 -
3.3.3. RM focused model:.............................................................................................................................- 12 -
3.3.4. Reactive RM:.......................................................................................................................................- 12 -
3.3.5. Online platform: .................................................................................................................................- 12 -
3.4. BRANDING AND MARKETING.............................................................................................................................- 12 -
3.5. Customer value propositions development process:..........................................................................................- 13 -
3.5.1. Board of directors.........................................................................................................................................- 13 -
3.5.2. Executive Management (EMC).....................................................................................................................- 13 -
3.5.3. Wholesale banking .......................................................................................................................................- 13 -

3.5.4. Product units: .....................................................................................................................................- 13 -
3.5.5. Chief of staff .................................................................................................................................................- 13 -
3.6. Customer Experience Division:.................................................................................. Error! Bookmark not defined.
Annex 1: wholesale banking customer value propositions (CVP) and action plan .............. Error! Bookmark not defined.

Acronyms
B2B: Business to business
C2B: Consumer to business
CBE: Commercial Bank of Ethiopia
CST: Client service team
CVP: Customer value propositions
EMC: Executives management committee
EVA: Economic value added
FCY: Foreign currency
Fin Tech: Financial Technology
IB: international banking
LC: letter of credit
PSs: Product specialists
RM: Relation manager
SMEs: Small and Micro Enterprise
SOE: State owned Enterprise
TAT: Turnaround Time
WSB: wholesale banking

1. INTRODUCTION
1.1. Back Ground
A value proposition is an outward-looking description of the offer that a financial institution
makes to its target clients. By highlighting value and thus differentiating the financial institution
products from competition, a value propositions influences a purchase decision, willingness to
pay and overall relationship matters. In order to put forward customer value propositions, the
bank segments the customers in to different segmentation .This segmentation help banks to
group customers by value to offer more tailored products and services.
Based on deposit performance, foreign currency earning and credit utilization CBE segmented
its customers into four sub segments i.e. Public sector and institutional customers, corporate
customers, Small and medium Enterprises (SMEs) and Micro-business customers.
The Bank has changed its strategy to customer centric and the new customer service model
requires enhanced customer value proposition based on customer segmentation which thus
requires differentiated customer services.
The basic elements of value propositions are product, pricing, service delivery and distribution
channel and marketing and branding.
The CVP guideline shall be used to offer a Value for the wholesale customer so that the value
can be clearly communicated to its target audience. The build Customer Value Proposition shall
communicate clear benefits to the targeted customers and the bank
Customer Value Proposition process guideline will be produced and documented to be used for
other customers in the market accordingly.

1.2. Objective
1.2.1. General objectives
To propose value to retain and attract Wholesale Banking customers
1.2.2. Specific objectives
 To identify the basic elements of CVP;
 To develop CVP framework for Wholesale customers;
1.3. SCOPE
CVP for Wholesale Banking customers to attract, retain and work with us.
1.4. Definitions of Terms
Unless the context requires otherwise;
A. “Bank” means Commercial Bank of Ethiopia;
B. “Brand Positioning” means a unique space a brand occupies in the minds of customers or
target market by associating emotions, traits, feelings and sentiments with it which
makes it
C. “Corporate Customers” means customers having better investable assets, trading
transaction and return from business and high contribution for the bank’s profit. They
are the upper class of wholesale banking customer segments of the bank;
D. “Customers” means wholesale Banking customers;
E. “Customer Experience” means customers’ collective experience in interacting with
various touch points of the bank or the accumulation of all the interactions that a
customer perceived along the entire journey;
F. “Customer Facing Division” means unit of the bank which interacts with customers
through all touch points, serve their needs and solve their problems on continuous basis;
G. “Customer Segmentation” means the approach of classifying a large and diverse
customer of the bank to smaller groups based on related traits in order to identify and
choose the most profitable customer groups to focus on;

H. “Customer Service” means giving support to customers during the use of the Banks
products and services that help them to have a convenient and value adding exercise
through all service channels;
I. “Customer Value Proposition” means the value that the bank promises to deliver to its
customers and that clearly explain the bank’s customers experience when they do
business with the bank;
J. “Digitization” means the process of automating manual and time-consuming processes
into digital formats with the adoption of technology;
K. “Institutional Customers” means wholesale Banking customers encompassing non-
government organs, associations, regional and international organizations, embassies,
religious organizations and other non-business organizations;
L. “Micro Businesses Customers” means customers having less investable asset, trading
transaction and return from business. They represent the lower class of private
wholesale banking customer segments of the bank;
M. “Product Divisions” means product owning divisions serving as back office unit in
customer service and are different from customer facing divisions;
N. “Public Customers” means Governmental organizations or wholly or quasi-budgetary
public bodies at Federal, Regional, City and local Governments and SOEs;
O. “Relationship Managers” means wholesale banking officers responsible for developing
and maintaining strong customer relationship and handle end- to- end banking needs of
customers by deeply understanding the customers’ need;
P. “Small and Medium Enterprises (SME)” means customers having average investable
asset, trading transaction and return from business. They represent the middle class of
wholesale banking customer segments of the bank;
Q. “State Owned Enterprises (SOE)” means legal entities that are created by the
government to partake in commercial activities on its behalf;
R. “Turnaround Time(TAT)” means a lead time or amount of time taken to complete
customer service process to fulfill a single request;
S. “Wholesale Banking” means banking that provide financial services to all non-individual
businesses, all trading individuals Public and institutional customer segments;

T. “Wholesale Customers” means business and institutional customers of the bank including
licensed business entities, government organs, SOEs, non-government organs,
associations, embassies, religious institutions, regional and international institutions.
2. Major Roles and Responsibilities:
2.1. Board of directors:
A. Provides strategic priority and directions on customer acquisition, mobilization of
resources, business expansion and associated allocation of resources;
B. Approves pricing framework based on standard metrics to ensure dynamic pricing
approach based on risk and value of customers;
C. Approves proposals on value propositions (pricing and products among others)
based on customer segmentation;
D. Fosters development of innovative products and services in line with market need
and emerging competitions;
E. Gives strategic directions on digitization of wholesale banking services to improve
customer experience and access of service through various service channels;
2.2. The President:
A. Set and continuously revise competitive terms and tariff on all wholesale banking
products and services in a manner that attracts and maintains high value customers and
ensure profitability of the Bank;
B. Establish and ensure across division decision making etiquette for products and service
offerings made to wholesale Banking customers in a manner that promote efficiency and
effectiveness;
C. Ensures digitization of wholesale banking services to improve customer experience and
access of service through various channels;
D. Initiates pricing framework based on standard metrics to ensure dynamic pricing
approach based on risk and value of customers;
E. Overseas integration of Wholesale Banking Division with other divisions of the Bank to
ensure streamlined workflow;

F. Ensures customer service delivery as per the standard turnaround time between
wholesale banking and product divisions in customer acquisition, proposition and
decision making functions to the satisfaction of customers;
G. Ensures that operation of wholesale banking services gauges towards satisfaction of
customers and attainment of the Banks vision and mission;
2.3. Wholesale Banking Division:
A. Assess customer needs and preference and forward to customer experience and product
units;
B. Open corporate center with collaboration of Whole strategic partner and transformation
office and other stake holders for high value customers;
C. Identify and pro-actively recruit wholesale banking customers and negotiate on products,
service and price offerings based on the customers value to the bank and facilitate
requests of high value customers with low risk profile to reduce the turnaround time
based on pre-approved limit and discretion given by the president;
D. Set and implement customers journey enhancement strategies and work with product
units, product development and customers experience to ensure continuous
improvement;
E. Set standard delivery time in collaboration with product units for all banking products
and service so as to ensure differentiated banking products and services and ensure its
effectiveness to bring about wholesale customer satisfaction;
F. Ensure the wholesale Banking customers experience is being improved through
digitalizing the customer’s journey and ensure accessibility of service through various
service channels;
G. Ensure effectiveness of the sales coverage model in terms of service delivery and
distribution channel and strive for contentious improvement;
H. Ensure product portfolio expansion to target priority segments and their respective value
chains; and
I. Ensure end-to-end banking needs of wholesale Banking customers are met at a single
point serving as customer facing division for all banking products and services.

2.4. Credit Division:
A. Introduce/Conduct differentiated underwriting process based on the risk level of the credit
customers;
B. Set predetermined limit for high value customers;
C. Set loan delivery time in collaboration with wholesale banking;
D. Ensure timely appraisal for the credit requests;
E. Ensure that timely processing collateral valuation; as per bank’s guideline;
F. Ensure proper collateral registration;
G. Ensure timely disbursement and collection of loans and advances;
H. Ensure that timely Decision Making; as per the Bank’s directions, policies, procedures and
standards; and
I. Ensure policy and procedures are in line with CVPS development by wholesale division
2.5. International Banking (IB) Division:
A. Work closely with wholesale banking to deliver IB product and services on time;
B. Set service delivery time in collaboration with wholesale banking;
C. Submit FCY allocation Program/schedule for high value customers;
D. Ensure customer segment based and transparent FCY allocation; and
E. Ensure policy and procedures are in line with CVPS development by wholesale division.
2.6. Retail and Branch Banking Division:
A. Ensure proper function of dedicated windows and staffs for high value customers;
B. Assign Dedicated staffs for cash-pick and cash in plant service; and
C. Ensure Cash collection & cash implant from/to their promises as per the limit/amount/set by
the bank in consultation with the branch banking specialist at CST Team.
2.7. Digital Banking division:
A. Avail digital banking products to be sold by the customer facing divisions;
B. Facilitate digitization of customer journey and customer experience;
C. Undertake customer awareness on the utilization of digital products; and
D. Follows the overall digital channel availability.

2.8. Customer Experience division:
A. Issue risk based variable interest rate and competitive fees and charges;
B. Select appropriate marketing strategies for each segments;
C. Develop branding for each segment;
D. Conduct market research to ensure the success of products;
E. Understanding customer behaviors and pain points;
F. Co-create new experiences with customers;
G. Ensure timely segmentation of all wholesale customers;
H. Ensure that the customer and the impact on the customer is embedded in all decisions,
designs and conversations;
I. Propose CVP to the president as deemed necessary; and
J. Promote approved CVPs for WSB customers.
2.9. Chief of Staff
A. Responsible for the overall business and economic research activities of the Bank, product
development and overseas business expansion;
B. Develop Pricing – terms and tariffs;
C. Responsible for Product development studies; and
D. Responsible for Domestic socioeconomic research.
3. BASIC ELEMENTS OF CUSTOMER VALUE PROPOSTIONS (CVP):
3.1. Product
Currently, the Bank provides full product packages and services for its customers that may
include but not limited to international banking products, credit products, branch banking
products ,digital products and online platform to be integrated with the company’s ERP system
in collaboration with the respective product divisions.
To be competitive in the industry wholesale banking division shall periodically asses the needs
and preferences on product and services. If there is any need identified in the assessment the
WSB put forward the needs to be addressed to customer experiences and product unit. These

products shall be delivered to wholesale customers considering economic value added to the
bank.
3.2. Pricing:
Pricing strategies are the methodologies and processes that businesses use to determine the
amount they charge for products and services. More often than not, an effective pricing
strategy also rewards loyal and high-yield customers by providing bundled services at reduced
costs.
CBE employ standard terms and tariffs (Price) for all segments of customers for the products
and services offered throughout the bank. But based on the customer value to the bank it is
imperative to be flexible and treated differently.
Wholesale banking shall assess the needs and preference of high value customers and forwards
their needs to customer experiences. Customer experiences in collaboration with the product
unit determine negotiation price for resource rich wholesale customers.
Negotiable price shall be applied on Economic Value Added (EVA) pricing approach reflecting
revenue per customer. For resource rich wholesale customers the bank shall negotiate and set
risk-adjusted pricing based on sector engaged, customer risk rating, customers profile and
deposit in light of growing competition.
3.3. SERVICEDELIVERY AND DISTRIBUTION CHANNELS
Hitherto, CBE employ uniform service delivery and distribution channels for all segments of
customers besides the customer’s value to the bank. However, as per the new transformation
the bank has changed its customer value proposition to customer centric model the new
customer service model requires differentiated distribution channels based on adopted
customer segmentation and avail discerned value proposition.
The wholesale banking customers shall be addressed through different sales coverage models
like client service team (CST), RM led model, RM focused model, reactive RM model and online
platform depending on the customer’s size and complexity to deliver its product and service via
branch, RM and digital platform.

3.3.1. Client service team (CST) led by knowledgeable and experienced RM. The team shall
be composed of product specialists (PSs) and industry experts to cover end to
end customer services including deposit products, transactional service, credit,
International Banking and foreign currency requests of customers. This model
dedicated for high value customers .Based on the account planning tools RMs
proactively address the needs and preference of the clients and advise them to
ensure their satisfaction.
3.3.2. RM led model: The model dedicated for Medium corporate customers.RM is the
main contact person for customers to cover customer’s end to end service and
product. Product specialists involves less frequently in led identification and
closing.
3.3.3. RM focused model: Dedicated for Small Corporate customers.RM covers end to end
service for vast Majority of products.
3.3.4. Reactive RM: Dedicated for SME customers. Little support of sales by RMs.
3.3.5. Online platform: Dedicated for Micro customers. No RM dedicated for these
customers mobile based sales support used.
RMs in wholesale banking used CRM model to facilitate service delivery and increase
customer satisfactions.
3.4. BRANDING AND MARKETING
CBE striving for customer led organization shall position its brand for each customer segment
in a manner that attract and retain wholesale customers which is manifested by most
accessible bank with enhanced presence by different channels, access to full banking solutions,
differentiated products and service, innovative bank with digital led product offerings
competitive in the industry.
The Bank portrays differentiated brand positioning based on adopted customer segmentation
and avail different customer value proposition (CVP) for different segments and sub segments
of customers.

Customer Experience is expected to insure effective branding and marketing among wholesale
customers by providing tools to be used for the bank’s products with the bank logo.
3.5. Customer value propositions development process:
3.5.1 Segment-based customer value development process: mainly used for
segment based new product development, price and interest change, service &
channel and branding & marketing value propositions. This process shall be led and
coordinated by customer experience division as per the request of the Wholesale
Banking Divisions, Other customer-facing divisions or from CX own initiation.
3.5.2 Personalized customer value development process: this process shall be
applied to develop personalized CVPs for high value customer based their needs
and preference. Since their request shall be addressed by shortest possible process
and time, it should be developed within wholesale banking divisions.
Stake holders and their duties involved in CVP development process
3.5.3 Board of directors: Board of directors are responsible for approval of value
proposed by customer experience above EMC discretion limit
3.5.4 Executive Management (EMC): Executive management are responsible for
approval of value proposed by Customer experience under their discretion limit
3.5.5 Wholesale banking: Wholesale banking division is a customer facing unit
responsible to assess the customer needs and preference, identify the customer
needs and forwarded to customer experiences to be developed customer value as
per the needs.
3.5.6 Product units: (International banking division, credit division, digital
banking retail and branch banking): Product unit responsible for the initiation
of development of new products and optimization of the existing products also part
of agile team in development of product specific to their product unit.
3.5.7 Chief of staff: Responsible for the overall business and economic research
activities of the Bank, product development and overseas business expansion.
3.5.8 Customer experience: Division is responsible organ to develop customer value
proposition cx received customer needs and preference from customer facing units,
new product idea from product unit and from external body. After identifying the
needs CX make market survey, risk and viability assessment in collaboration with
product unit and develop customer value. Customer experience in collaboration
with wholesale banking division select value suitable for each segment and forward
to EMC or Board as appropriate for approval.

.
Diagram 1. Personal and segment based CVP development process

Annex 1 proposed customer value propositions for wholesale banking customers
No customer
segmentations
proposed CVP Responsible organ Remark
1 LARGE
CORPORATE
Dedicate client service team client service
team (CST) led by knowledgeable and
experienced RM;
WSB
Open corporate branch ; WSB
Avail dedicated windows and RMs in each
branch where the large corporate customers
account maintained;
Retail and branch
banking
Allocate FCY on regular basis; IB
Resume Project loan finance; credit
Resume revolving LC facility; The president
,credit
Optimize and offer Lease finance and
deferred LC/supplier credit;
EMC ,credit, cx ,
Issue risk based variable interest rate and
competitive fees and charges;
CX, Credit Initiatives
start at
Jan.2023
Set Preapproved limit based on customers
credit score, income and transaction history;
credit ,EMC
Offer differentiated under writing
process(swim lanes) based on the riskiness of
the request;
credit ,EMC
Offer sector specific bundled across the value
chain;
credit ,EMC
Cash implant and cash collection service at
their business premises/office;
Retail and branch
banking
Flexible on negotiation of FCY proceed; EMC,IB, Wholesale
banking
Negotiable interest rate on saving and time
deposit.
EMC ,retail and
branch banking
2 MEDIUM
CORPORATE
Dedicate RMs to cover end-to-end customer
need for standard products and service from
lead identification to product/service delivery;
WSB

branch where the large corporate customers
account maintained;
WSB
Resume the Project loan requests; credit
,credit
credit ,EMC
the request;
credit ,EMC
their business premises/office; and
Retail and branch
banking
EMC ,credit, cx ,
Flexible on negotiation FCY proceed. IB
3 SMALL
CORPORATE
Dedicate RMs to cover end-to-end customer
need for standard products and service from
lead identification to product/service delivery
for Medium corporate customers;
WSB
Dedicate special branch and special windows
and RMs in each branch which serves the
request of corporate customers;
retail and branch
banking
the request;
credit ,EMC
EMC ,credit, cx ,
Flexible on negotiation FCY proceed. IB
4 Sate owned
enterprises
(SOEs)
Dedicate client service team (CST) led by
knowledgeable and experienced RM;
WSB
Open corporate branch ; WSB
branch where the SOEs customers account
maintained;
retail and branch
banking
EMC, credit ,CX
EMC ,credit

the request;
EMC, credit
retail and branch
banking
Flexible on negotiation of FCY proceed. WSB,IB
Negotiable interest rate and competitive fees
and charge;
EMC, CX, IB, Credit
Digital micro lending facilities for their
affluent employees based on FCY inflow
saving, transaction or cash flow history.
credit
Respond their personal FCY request (may be
for vacation or medical purpose) on time with
reasonable amount.
IB
5 International
& regional
organizations,
unions,
cooperatives,
associations,
NGOs and
Embassies:
experienced RM;
WSB
Open corporate branch; WSB
branch where the institutions customers
account maintained;
retail and branch
banking
Allocate FCY on regular basis for those
cooperative society customers engaged in
international trade;
IB
,credit
EMC ,credit, cx ,
and charges;
EMC ,credit, cx ,IB
EMC, credit
Offer differentiated underwriting
the request;
EMC, credit
chain;
Credit,
their premises/office and deposit voucher
amendment with regard to the area’s mostly
used language, as appropriate;
retail and branch
banking

Flexible on negotiation of FCY proceed; IB
arrange/provide capacity building trainings; WSB
Digital micro lending facilities for their
affluent employees based on FCY inflow saving
transaction or cash flow history;
credit
Provision of digital/online banking services
through system integration and/or giving fast
and quality banking services; and
WSB, credit IB,
Digital banking ,
retail and branch
banking
Provide consumer loan for their staffs at a
competitive interest rate.
Credit
6 CVP for Public
Institutions
(Federal and
High Value
Regional
offices)
experienced RM ;
WSB
open corporate branch; WSB
their premises/office;
retail and branch
banking
and charges;
EMC,CX, credit, IB
Offer segment specific bundles for their
employees and higher officials and
WSB
Provision of digital/online banking services
through system integration and/or giving fast
and quality banking services at branches.
WSB ,digital
banking
chain;
WSB, credit
retail and branch
banking
Flexible on negotiation of FCY proceed; and WSB,IB,EMC
Negotiable interest rate on saving and time
deposit.
EMC,CX, credit,
retail and branch
banking
7 SME
CUSTOMERS
Enable C2B and B2B mobile payments for
merchants through CBE birr;
Digital banking,
credit
Dedicated RMs who can draw in products
specialists upon request; and
WSB
Digital lending based on mobile transaction or
cash flow history within few step.
Credit ,digital
banking
8 Micro
customers
Digital instant loan and saving Digital banking,
credit
provide loan and saving in collaboration with Digital banking,

Fin Tech credit
Enable C2B and B2B mobile payments for
merchants through CBE birr;
Digital banking,
credit
Digital micro lending facilities based on saving
, transaction or cash flow history; and
Digital banking,
credit
Organize financial literacy events for traders. WSB, Digital
banking, credit

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