Our client is a top-tier domestic Asian bank with an expanding global footprint. Private Banking is a strategic growth area in which they could leverage their strong client relationships, wealth management expertise and global footprint to build a robust Private Banking business. To realize this vision, they had already made considerable investments in building a fledgling Private Bank, but the return on investment was hitherto disappointing. After multiple rounds of reviews including third party consultations yielded no tangible turnaround, Stamford Advisory was engaged to conduct a fundamental review of their Private Banking business, including an honest assessment of their value proposition and fundamental business viability. Whilst our recommendations remain clearly private and confidential, suffice to say that we had helped to engineer a fundamental re-focusing of the business, and the results today are more than encouraging – the business is generating healthy returns and, most importantly, securely positioned on a trajectory of sustainable growth.

Our client is a leading unsecured lending and credit card player in a highly competitive and sophisticated consumer banking market. Whilst they have done well to-date, in light of the increasingly tightening regulatory environment and evolving market dynamics including the emergence of new players and technologies, our client wanted to validate their vision for future growth and development. Accordingly, Stamford Advisory was engaged to conduct a quick and sharp ‘classic’ diagnostic of their current business and portfolio opportunities, and develop a future growth blueprint comprising of both growth and strategic initiatives, balancing shorter term economic goals versus longer term development needs – which had always been source of constant internal debate. As virtually all strategic blueprints go, they would have to be adjusted in line with changing market conditions, but by and large our client has adhered to the trajectory mapped out, and appears to be striking a healthy balance between economic growth and future investment, especially in the exciting areas of payments and digital banking.

Risk management consists not just of risk measurement, but also applying the outputs of accurate risk measures and metrics into the day-to-day operations and business of the financial institution. In other words, risk measurement is the means to the ends of incorporating risk considerations into the management, strategy and culture of the institution.

With this in mind, Stamford embarked upon the journey of improving risk management with a key financial institution client more than 5 years ago:

1.The first stage was establishing the foundations of risk measurement – building risk measurement models, and validating and improving the existing risk models, policies and frameworks

2.Having gained the confidence of the business leaders with regards to the risk measures, the second stage was then to apply the risk measurement outputs to key risk controls, such as risk and exposure limits, delegation of approval authorities, and streamlining the credit processes to ensure that the loans and borrowers with the highest risk would get the most attention from the business leaders

3.The third stage was to further embed risk culture in every aspect of the business, and there is no better way to do this than to ensure that the performance of the businesses and bankers is measured not just in financial terms such as revenues and profits, but also in terms of the risks taken, for example using the concept of risk-adjusted profits

4.Finally, as the business leaders and bankers start taking notice of how their incentives were shaped in terms of risk-adjusted profits and revenues, the discussions on business strategy started to focus not just on market and financial strategy, but on risk strategy as well – how much risk the institutions was willing to take to achieve its profitability targets and how these targets were to be set

5.The institution, through the process of establishing risk measurement, risk controls, risk management and finally embedding these considerations in risk strategy, is now well on its way to developing a deeply ingrained risk culture throughout the organisation!

Customers are at the centre of every business. Much has been said, and rightly so, about enriching the customer experience, and being customer-centric in terms of how a business is being run. What’s equally important to every business, at the end of the day, is the ‘value’ that the customer brings, how that value can be measured, and interestingly how that value can be potentially modelled for prospects or existing customers whose contribution today may be ‘deceptively’ low. We have worked with a long term client of ours, a leading consumer bank, to develop a suite of models that measure customer value – today and in future – based on inputs such as demonstrated behaviour and comparative analysis. The output is also channelled into analytical tools that enable our client to make more informed business decisions, ranging from pricing to resource allocation. Most importantly, by collaborating closely with our client over the long term, they have embedded not just the ‘hardware’ but also the ‘software’ in terms of analytical thinking into their business processes and organisational ‘DNA’. Our client’s success speaks for itself – they have grown from a mid-sized player to one of the largest consumer credit players in the market, with a reputation as one of the most innovative ones to boot.

Target setting for businesses, be they your ubiquitous bank branch or retail outlet or fast food kiosk, is a well-established management practice. The ‘traditional’ way to set targets usually involves a combination of assessing historical performance, future growth goals, general market conditions and any specific constraints such as resources. The problem with such an approach tends to be that it does not explicitly factor in more ‘objective’ measures of the local business potential. To break free from the traditional constraints of target-setting for their bank branches, our client engaged us to develop a new innovative approach, leveraging some of the ‘big data’ available to transcribe the commercial potential of each branch’s local catchment area, and incorporating such inputs with internal branch and customer data into a branch target optimisation model. The model that we developed employs machine-learning techniques to extract business insights from the vast volume of data, summarized into meaningful ‘predictors’ of business performance for each branch. The proof of the pudding is in the tasting, so to speak, and this new model-driven approach to target setting has been rolled out to the branches, with a generally high level of acceptance by the critical end-user pool at the end of the day – the branch managers themselves.