group management and productivity enhancement by ... operations and enhancing customer satisfaction...
TRANSCRIPT
Group Management and Productivity Enhancement by Shinsei Bank Group
February, 2018
Akira Hirasawa Chief Officer of Group Organizational Strategy Group Headquarters Shinsei Bank, Limited
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Direction of Group Management
Establish unique and effective group governance framework with strong sense of integrated management within Shinsei Bank Group, considering the current environment and advantages of the Group
[Current environment] • Change in social structure and lower
margins in traditional finance business • Change in needs, focus, and
expectations of customers • Emergence of new players and
innovation of financial and information technologies
[Advantages of Shinsei Bank Group] • A group consisting of extensive
sectors • Group companies under almost full
ownership of the Bank • Quick decision-making by the
management team
× Group EC1 & Important Committee
2 Consolidated
corporate functions
(Group HQ)
1 Cross-Group organizations
(Units)
3
[Direction of Group management]
• Group integrated management (governance enhancement)
• Platforms for business development • Simpler organization and quick
decision-making
Medium -to-long
term vision (See p12)
【Group Governance Framework】
1 Executive Committee
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Group Governance Framework I) Integration of Group Support Functions (Group Headquarters)
This governance framework is completely different from that of all-too-common business holding company or pure holding company. Group support functions (Corporate Function) are integrated into the Group Headquarters as a virtual company, and all businesses including the Bank will be reorganized into equal business units.
Source: P14, 2nd meeting(January 16, 2018) secretariat presentation material by CGS(Corporate Governance System) Research Group, METI
BoD BoD
Business B
Business A
Business C
Group Executive Committee (Group EC), Group Important Committees
Board of Directors
Corporate function (Group HQ)
Company Group under business holding company
Parent company
BoD
BoD
Corporate Function
Business A
Business B Business C
1 business unit
BoD BoD
Biz
Biz
Back
Back
Subsidiary a Subsidiary b
Company Group under pure holding company
Holding company
Corporate Function
Mgm
t. Strategy
1 business unit
BoD BoD BoD
BoD BoD
Biz
Back
Biz
Back Biz
Back
Biz
Back
Biz
Back
Subsidiary a Subsidiary b
Subsidiary c
Sub-sub a Sub-sub b
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Group Governance Framework I) Integration of Group Support Functions (Group Headquarters)
The integrated group support functions (authority, operations, and human resources) are managed across the Group mainly by Chief Officers, to realize efficient and enhanced functions.
G Human Resources
G Corporate Planning & Finance
G Risk Management
G General Services
G Legal & Compliance
G IT* *Apr. 2018 -
Banking business (Shinsei Bank)
Shopping credit & card businesses (APLUS Financial)
Personal loan business (Shinsei Financial)
Leasing business (Showa Leasing)
Other businesses
Support function*
Support function *
Support function *
Support function *
Chief Officers by function
Group Headquarters
G= Group
* Each company will only maintain the functions necessary for internal control and meeting regulatory requirements.
• Convert functions into business units • Convert each business into equal business units
through the integration of group support functions into Group Headquarters as a virtual company
• Consolidate overlapping functions • Remove overlapping functions and reduce
workload
• Expand room for better efficiency • Realize room for much better efficiency by
sharing best practices and jointly implementing new methods
• Enhance functions across the Group・・・・・・・・ • Further enhance Group functions using extra
management resources realized through better efficiency
• Decision-making level
• Enable quick and consistent decision-making without establishing a holding company and by simplifying reporting lines
Objectives of Group Headquarters
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Group Governance Framework II) Group Executive Committee, Group Important Committees
Important matters under Group strategy are resolved at Group Executive Committee and Group Important Committees attended by CEOs of Group companies as members of Group management team.
Committee Major purpose, etc. Presidents of Group member companies*
Group Executive Committee
President’s resolution body for daily business execution related to consolidated management
◎
Group Management & Development Committee
Discusses, coordinates, and decides on the Group’s HR system and initiatives
◎
Group Compliance Committee
Shares, coordinates, and decides on the Group’s compliance system and matters
◎
Group Risk Policy Committee
Discusses the Group’s portfolio risk management policy, management framework, and policy for key portfolios, etc.
○
Group ALM Committee
Discusses, decides policy for, and resolves medium-to-long term matters relating to ALM operation.
○ Group member companies (including the Bank)
Group Executive Committee
Support function
Businesses
Group Important Committees
Support function
Delegate authority Report
*◎: Attend regularly; ○: Attend depending on the agenda
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In order to respond to diversified and borderless customer needs, establish dedicated organization that creates synergies in business and management and fundamentally reforms Group businesses
Group Governance Framework III) Cross-Group Organization: Unit
(Mission) Review business operation systems on a group-wide basis, develop the Group’s new businesses, and consider and implement strategic partnerships in order to develop the new businesses
Group Business Strategy Division
(Mission) Build the specific Group organizations needed for executing Group business strategies and promote projects for enhancing the productivity of the entire Group
Group Organization
Strategy Division
Shinsei Bank
APLUS Financial
Shinsei Financial
Showa Leasing
Established in Apr. 2016
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Group Governance Framework III) Cross-Group Organization: Unit
Establish “Cross-company Business Unit” consisting of cross-company members working across multiple companies in order to facilitate businesses to fully demonstrate Group functions based on customer needs and to promote initiatives between Group member companies
Institutional Business
Cross-company Business Unit Established
in Apr. 2017
Structured Products
Individual Business
Financial Institution Business
Analytics
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• Move to a Group HQ system • Reduce non-personnel
expenses • Reform operations • Reorganize / consolidate
businesses
• Optimize office network • Review products & services • Utilize AI, RPA, etc.
Initiatives for Enhancing Productivity
Enhance productivity in a sustainable manner through initiatives including excluding redundancies, applying best practices, and optimizing resource allocation under consolidated Group management. This is a different approach from simple cost reduction.
Reduce redundant costs
<Expected effects>
Phase 1
Phase 2 Fully review businesses
• Smaller workload (generate extra personnel)
• Reduce non-personnel expenses
• Expanded top line (re-allocate resources)
• Improve servicing efficiency
Add Value to
Customers
Increase Corporate
Value
Enhance productivity
9
Reference
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[Reference] Specific Initiatives for Enhancing Productivity (1)
Optimize branch network Improve call center efficiency
• Planning to close Shinsei Bank’s retail and institutional branches in Takamatsu and Kanazawa by June 30, 2018. Three retail branches (Kawaguchi, Sakaihigashi, and Takatsuki) will be closed by February 28, 2018 (The number of Bank branches as of February 28, 2018: 32)
• The Lake business will close 30 unprofitable branches by February 28, 2018
• Implement initiatives eyeing stronger customer
needs for non-face-to-face channels and improving services by strengthening the coordination between face-to-face and non-face-to-face channels
• Focus management resources including human resources on fields that have higher added value for our customers
• Promoting a project aimed at improving call center operations and enhancing customer satisfaction of Group member companies
• Improving operational efficiency eyeing the usage of RPA and AI, as well as reviewing customer support processes (printing materials, FAQ, talk scripts, etc.) and reducing the number of inbound calls by using the Internet and applications
• Bank call center reduced its service hours for
deposits, etc. from February 2018 by enhancing functions relating to transactions and administrative applications via the internet including smart phone
• APLUS’ customer support reduced the number of inbound calls by about 25% YoY by sharing best practices of other Group member companies
Retail & Institutional businesses
- June 2018
Group member
companies in
progress
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[Reference] Specific Initiatives for Enhancing Productivity (2)
Reorganize businesses by consolidating subsidiaries
Improve housing loan process efficiency
• Reorganized businesses that are expected to
create synergies by being consolidated in the Group
• Servicer business consolidated ALPHA SERVICER and Shinsei Servicing & Consulting
• Mortgage loan business consolidated Shinsei Property Finance and Shinsei Investment & Finance
• Aiming to create new businesses beyond the
existing framework by fundamentally reviewing our businesses from the customer’s perspective
• Established wholly-owned subsidiaries for the two businesses to create a simple governance system
• Drastically improved housing loan credit
screening process by implementing a new workflow • Shorter credit screening time • Better workflow by reviewing operations • Online group credit life insurance • Outsourced simple operations related to
credit screening => 30% cost saving
• Outsourced loan remittance processing
• Started to implement RPA in credit protection
and management after disbursing a housing loan
Institutional Consumer
Finance Oct. 2017 Retail - Mar. 2017
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[Reference] Summary of the Shinsei Bank Group/Medium-to-long term vision
Shinsei Bank
Bank
-
APLUS Financial
Shopping C
redit C
redit Card
95 %
Shinsei Financial
Personal loan
100%
Showa Leasing
Leasing
100%
Shinsei Securities
Securities
100%
Shinsei Trust & Banking
Trust
100%
Other subsidiaries: Mortgage loans, servicing, asset management, etc., which are wholly-owned by Shinsei Bank
Sector O
wnership ratio
Shinsei Bank Group Medium-to-long term vision (Announced in Jan. 2016)
1.To be a financial innovator that provides innovative financial services made possible through the integration of its Group companies
2.To be a financial group that achieves outstanding productivity and efficiency by implementing lean operations through ongoing improvements and reforms
3.To be a financial group which, in addition to rewarding its stakeholders, is unified by the core values born from confidence, sense of fulfillment, and the pride created through the achievement of the above
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Disclaimer
• The preceding description of Shinsei’s Medium-Term Management Plan contains forward-looking statements regarding the intent, belief and current expectations of our management with respect to our financial condition and future results of operations. These statements reflect our current views with respect to future events that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate. Potential risks include those described in our annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place undue reliance on forward-looking statements.
• Unless otherwise noted, the financial data contained in these materials are presented under Japanese GAAP. The Company disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or developments. Unless otherwise specified, all the financials are shown on a consolidated basis.
• Information concerning financial institutions other than the Company and its subsidiaries are based on publicly available information.
• These materials do not constitute an invitation or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.