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Cooperative banks—Manage finance, risk and compliance

“We know how cooperative banks can manage to control risks and regulation. Our approach covers all relevant topics—from strategy to planning and controlling the bank to reporting.”
Christoph Balke, Senior Manager, zeb

Challenges

Cost pressure on the rise
Low and further declining margins in the interest-rate and lending business continue to increase cost pressure on savings banks. Also, less and less income is generated from money market and capital market transactions. Savings banks must be able to understand every product, every type of product and every business segment in detail and precisely control their profitability. This is a mandatory basis for strategically defining objectives and aligning customer and proprietary business.

Regulatory requirements are becoming more complex                                                       
In addition to the difficult conditions on the financial markets, savings banks must also consistently integrate stricter regulatory requirements into their management processes. The professional implementation of supervisory requirements is a basic prerequisite for audits by the supervisory authorities and can minimize the need for additional capital requirements for savings banks

Digitalization requires willingness to adapt
Digital innovations are changing customer behavior and workflows within institutions. They offer savings banks a number of opportunities to increase efficiency, which they should definitely take advantage of. One of these opportunities is the automatic creation of data within an institution—from customer contact to regulatory reporting. Methods, processes and reports can be standardized across all savings banks. With the help of new, agile methods, institutions can organize and develop themselves more efficiently.

Insights

Changes in the financial markets and new customer behavior are forcing every cooperative bank to evolve the methods and technologies it uses to manage the entire bank. In addition to bank management tasks, the institutions must review their investment activities on money and capital markets in order to manage risks in customer business more reliably and better exploit the potential of proprietary business.

Cooperative banks will still have to deal with the implementation of new supervisory requirements for some time to come, even though the publication of new rules may have passed its peak. While ParcIT and Fiducia & GAD gradually deliver the conceptual design and implementation of increased regulatory requirements in “Agree21” and “VR-Control”, implementation is the responsibility of the individual institutions. 

As a result, almost all bank management tools will change. Managers and employees are confronted with new challenges in bank management. Further training, retention and recruitment of employees are critical for an institution’s future viability.

Requirements on the role understanding of employees in bank management will continue to change significantly

Solutions

zeb helps cooperative banks to optimize integrated strategy and planning processes. We answer existential questions such as these: 

  • Is the business model future-proof? 
  • What is the optimal level of costs? 
  • How can institutions set up efficient sales management that takes account of changing customer behavior and the use of digital channels? 
  • What measures can be taken to efficiently manage capital requirements?
A key prerequisite for being able to deal with the negative interest rate level is a differentiated view of the individual components of net interest income.

 

 

To react to changes in customer behavior, cooperative banks must adjust or realign their income and cost management, risk controlling and regulatory reporting. zeb assists in introducing omni-channel management, i.e. measuring sales performance via the respective channels from branches to online banking. We support our clients during regulatory audits and their follow-up. The same applies to the implementation of standardized processes to analyze new regulations. All the while, we keep an eye on cost efficiency and financial impact.

To systematically optimize the wealth structures of cooperative banks, we implement new asset allocation processes, in which we closely integrate the corporate strategy and risk controlling. This allows us to ensure that both integrated performance and risk management and regulatory requirements are considered. Aside from handling methodological and procedural issues, we also use agile and innovative methods to further develop the organizational structures in bank management. 

Feel free to contact us

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Benedikt Brandt

Senior Consultant

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Dr. Jörg Münstermann

Senior Manager