Corporate Banking is focused on the specific financial services required by large corporate customers. Commercial Banking generally refers to smaller businesses and / or professional partnerships. A common issue for both Corporate and Commercial Banking organizations involves the Relationship Management function. Driven by revenue generation and customer acquisition and retention, it is imperative to shift all non-customer facing support activities away from the Relationship Managers to support staff (assistants) or directly into the operations areas (back-office). The separation of activities is not always straightforward; the fact is that most support activities have some degree of customer contact.
The corporate back-office supports several functions, most commonly Trade Finance, Corporate Loans and the Corporate Credit. More often than not, the Credit function is somewhat convoluted and the credit authority is not distributed in a rational manner.
Based on LoBue's extensive experience with corporate banking, the elapsed time of transaction completion tends to be of equal importance to cost containment. One of the key tasks in a LoBue consulting project includes the identification of bottlenecks and the key "pain-points." Focusing on the pain-points and customer touch points tends to yield the quickest results for process optimization, cost reduction and service improvement. As part of the examination of the credit policies and credit procedures, LoBue had often been asked to modify and, on occasion, develop credit manuals and desk top procedures.
LoBue had well over 100 assignments in major financial institutions involving the Corporate Banking, Treasury and the Capital Market functions. In each assignment we were tasked to improve the timeliness of the product delivery and to reduce the operating cost.
In a significant assignment, a major Midwestern financial institution had an extensive corporate client base, where the relationships were distributed among more than 100 Relationship Managers. Each Relationship Manager had two or more assistants who were relegated to largely clerical roles with no customer contacts. LoBue analyzed all activities and determined that much of the routine customer contact can be assigned to the assistants and approximately 25% of all activities involving no customer contact can be transferred to the back office (operations). The redistribution of tasks and activities, allowed a reloading of the corporate accounts and resulted in the reduction of relationship managers by approximately 20%.