New business models for government's Postbank in Europe

The Post Office is a key player in the country’s retail banking market. Its Financial Services Division represents 25 percent of total revenues and has a huge customer base (25 million clients, 12 million current accounts). However, the division suffers from structural weaknesses, including limited product range, low equipment rate, and declining market share.

Challenge
The government authorized the Post Office to expand their product line, in particular mortgage, upon its becoming a separate, corporate entity in full compliance with banking regulation. A.T. Kearney was hired to design and manage the global transformation program, creating the Postbank and its launch.

Approach
This multi-year transformation program encompassed 13 workstreams and more than 250 projects sponsored by the top management team.

Beyond traditional change management workstreams, the transformation work focused on several specific issues:

• Governance structure of the bank and its top-level organization
• 5-year business plan and balance sheet projections
• Design of a dozen service level agreements between the Postbank and the postal network in order to structure and organize the relationship with full transparency
• Set-up and enhancement of specific banking functions: risk management, control, asset liability management
• Implementation of fully compliant accounting and reporting systems
• Management of the IT transformation with a portfolio of over 75 projects
• Consolidation to fill in the application form required by the regulatory body to deliver the banking license

The project was managed in close cooperation with the bank’s Executive Committee and required the mobilization of more than 300 internal line management resources.

Result
As a result, the Postbank was ready to operate as a stand-alone entity on schedule, with authorization to launch the mortgage business and enhance the overall business model. At present, we continue to work with the Postbank to enhance their product and processing strategies.