Cost reduction PMO for a leading retail bank
Designed and led a cost reduction programme for a retail bank to drive a further 10% out of an already-lean cost base.
The programme deliberately combined our external orchestration, expertise and challenge with firmly-held internal accountability for identifying and driving out the programme’s benefits, resulting in high levels of ownership. The successful implementation quickly realised a first tranche of benefits and is on track to deliver them all within a three year period.
Following significant restructuring, our client, a top-three Irish retail bank, had emerged from the 2007-onwards financial crisis as a stable business, and was now looking to grow. It had obtained ECB approval for a new capital plan, having demonstrated a return to profitability in the underlying retail business. To attract further capital from private businesses, the bank still needed to demonstrate “good management of the good bank”.
This heightened the need for cost control and an improving cost-income ratio. Our task was to support them to further reduce the cost base by 10% over a 3-year period.
We tackled the project in two phases. In the first 8 weeks we detailed the underlying cost baseline, confirmed priority areas and potential opportunities for review, and put a project structure in place to realise the short and medium-term benefits. In phase 2, over 7 months, we implemented quick wins, and redesigned processes to release longer-term opportunities.
The project was designed with Eden McCallum orchestrating and driving the overall process and the client accountable for identifying and driving out the benefits, which resulted in high internal ownership of the plan. Throughout, we challenged management, first to be more ambitious, and later to maintain momentum and stick to targets.
We have now handed over the implementation to our client, with €17m out of €25m cost benefits already realised, and plans on track to deliver the rest within the original three year period.