Program “Bank Branch”
Program "Bank Branch" (EU-Bank)
The Daimler Financial Services AG (DFS) offers a wide range of automotive-related financial services to customers all over the world. The financial services offered by DFS include everything from vehicle leasing/financing, dealer financing and commercial fleet management to insurance products, banking services and innovative mobility services. In Germany, DFS’s business is carried out by the Mercedes-Benz Bank AG (MB Bank) and its subsidiaries. With total assets of EUR 21 bn, MB Bank is Germany's second-largest automotive bank.
1. Background and
As part of its strategic development plans, MB Bank is to become the key unit for the European business of DFS. To this end, carefully selected European financing companies of DFS are to be successively integrated into MB Bank by use of the so-called “European passport”. At present, the dealer financing businesses of Spain and the UK have already been transformed into European branches of MB Bank.
Looking ahead, there are plans to expand MB Bank’s branch network to include other DFS subsidiaries. This bank branch program aims to achieve the following strategic objectives:
- Diversification of funding sources, especially in cases of high economic and financial volatility
- Consistent management approach for all European countries
- Usage of MB Bank’s risk management and consistently high quality standards as a Europe-wide benchmark
- Strengthening of the equity and liquidity pools by means of a centralized management and demand-based capital allocation approach
- Creation of a foundation for the further harmonization of processes at a European level and for a future-proof, modern IT landscape
zeb was assigned a variety of tasks in the “Bank Branch” program. As a first step, a feasibility study was conducted by zeb in order to identify and assess possible implementation obstacles in several countries. Using these results, zeb developed a general implementation roadmap for the countries in scope. As a second step, zeb supports the integration of the dealer financing business and portfolios of MBFS France into MB Bank.
In the course of the feasibility study, the strategic vision for MB Bank was outlined and further elaborated—involving, among others, the MB Bank treasury department for the definition of a funding strategy. Additionally, a gap analysis was carried out to identify and avoid possible obstacles at an early stage. The findings of the feasibility study were included in the development of a new project plan. zeb also supported MB Bank concerning the communication of initial project results within DFS and Daimler as well as with external stakeholders such as the supervisory authority and the deposit guarantee fund.
During the subsequent implementation stage, as part of which the French dealer financing business was integrated into MB Bank, zeb supported the overall Bank Branch program through the following activities:
- Program management: Supporting the setup of an appropriate program organization using the required structures, processes and tools and continuing the further development of the program management approach
- Anti-money laundering concept: Developing and supporting the implementation of a group-wide anti-money laundering concept that includes all branches abroad and takes local legal requirements into account
- Harmonization of the Europe-wide framework of processes: Developing and supporting the implementation of a consistent processlandscape across Europe, making use of standardization potentials
- Risk management: Developing a structure for risk governance through an as-is and gap analysis combined with best practice approaches; developing a technical concept for the future risk management governance, methods and processes
- Preparation for retail portfolio: Structuring and detailed planning of measures for the integration of a retail portfolio and the development of a concept for an adequate project organization
3. Project results
The successful integration of the dealer financing business of MBFS France at the start of 2014 is a crucial step for MB Bank towards becoming a pan-European credit institution. As a result of the project, MB Bank’s risk management was further harmonized and now also encompasses individual country-specific aspects. Banking processes and their documentation were comprehensively harmonized and systematically reorganized. Furthermore, a first step was made towards the harmonization of different countries’ regulatory requirements.
Following the integration of the French wholesale portfolio, there are plans to integrate all financing activities of other core European countries into MB Bank using the “European passport”. In the medium term, MB Bank will thereby make a significant contribution to the growth, efficiency and risk reduction within DFS.