麦肯锡案例研究2financeBuildingabankfromthegroundup.doc

Building a bank from the ground up
An ambitious, customer-focused strategy created a bank unlike any other in the market.

The client
Headquartered in the Middle East, the client is one of the region’s largest and oldest banks. It serves retail, corporate, treasury, and investment customers, incorporating modern banking services with traditional practices and values.

The situation
After half a century of successful operation, the client was looking for ways to grow its business. Around this time, Malaysia’s central bank invited the client to consider expanding to the country and offered a license to operate there.

To assess the potential in Malaysia, the client asked McKinsey to perform a traditional market entry analysis. Once we presented the strategic recommendations, the client decided to proceed. They asked us to collaborate with them as they embarked on an ambitious program to build the new bank from the ground up.

McKinsey’s contribution
The market entry project was our first for this client. The client selected McKinsey because of our strong presence across the Middle East and Malaysia and our deep knowledge of the financial services industry. The client also appreciated our ability to assemble an international team of experts who understood the challenges involved in a project like this (e.g., retail operations, banking, IT, marketing). Our work on the market analysis resulted in a strong relationship and a natural transition to the development strategy and implementation.

Impact
We helped the client understand the opportunities of the Malaysian market and how to create an innovative, customer-focused bank unlike any other in the market. For the next year and a half, as the client hired a CEO and its first staff in Malaysia, we worked alongside them to define, develop, and deliver the essential elements of the new bank:

· Distribution channels
· Products and services
· Organization and human resources plan
· Technology and operations
· Marketing and customer acquisition
· Financial budgeting and management
· Regulatory management and administration
· Physical infrastructure and site plans
Within three months of launch, the bank opened 12 branches, putting it on schedule to meet its 5-year goal of 50 branches. In addition, the bank was able to attract top talent to fill 300 jobs. It has been well received by the public and the press.
The bank is midway through a 5-year plan, guided by three principles:
Convenience: The new bank will have more branches and ATMs at accessible locations than any other foreign bank; longer open hours; and world-class technology and efficient operations to reduce customer wait time.
Service: Customers will be guaranteed a superior branch experience from the moment a friendly face greets them at the door through the sales and service process. The bank expresses a customer-first attitude in training, marketing, and touch-point design.
Innovative firsts: Products will be designed with a complete understanding of the customer experience. Processes will be user-friendly, convenient, personalized, and largely paperless.

Defining the opportunity
The client wanted to grow internationally, and Malaysia appeared to be a likely site. Our market entry analysis revealed an opportunity for a bank to differentiate itself by combining traditional values with efficiency, unique products, superior service and broad accessibility. The client decided to proceed and asked us to help build the new bank from the ground up.
Although many established banks already operated in Malaysia, our analysis identified gaps that were not being addressed. By interviewing individual and corporate customers and conducting firsthand competitive research, we confirmed that these gaps represented opportunities for our client.
Broadly speaking, for example, international banks offered strong products and good service, but were not convenient or available to most customers. Domestic players offered wide access but not the same quality, service, speed, and other distinguishing factors customers deserve. Meanwhile, insights from a marketing firm we worked with revealed that Malaysians did not associate trust with the banking sector at all. There was a clear opportunity for the client to combine efficiency and passion, high-performing products, superior service, and accessibility to all customers in a bank founded upon universal values that all customers could appreciate and respect.
To succeed, the client would need to capture public attention immediately and acquire and retain customers. Because most consumers and businesses already have banking relationships, the client would have to position itself as offering service and value in such a distinctive and powerful way that customers would be willing to not only change banks, but also become evangelists for the new bank.
The key questions for the team were:
· What will the bank look like?
· Who are the target markets?
· What differences will provide competitive advantages?
· How can the bank create a great customer experience?
· What products will be offered at launch? What features will make the best consumer banking products?
· What does headquarters look like? How many branches at launch? How many ATM centers, and where are they located?
· How do we initiate the hiring process? What experiences and skills will help the bank differentiate itself?
· What are the marketing requirements for advertising and launch? What agencies can best deliver for the client?
· What are the costs and overall financial returns of this strategy? Would this be attractive to headquarters?
This project gave us the opportunity to be both strategic and tactical. As we assembled our team, we integrated industry expertise with local presence.
Because the client needed all of its existing personnel to manage its successful operations at home, it began the engagement with no employees in Malaysia. We provided resources to fill the gaps, and as the employee base grew from one to more than 300 employees, we worked with the client, day in and day out, to help build the bank.
We brought in team members from across our organization with backgrounds in banking, financial services, and specific business functions. For example, Robert provided the business technology and operations expertise to help build the technology and operations infrastructure. Ei-Mynn led the product development, market testing of all unique and different components of the strategy, and development of the comprehensive marketing and public relations plans. One project colleague is an expert in Malaysia; others in bank cards; still others in sales.
Ozgur, an associate principal at the time and now a partner, was responsible for directing the overall team, and he made sure the client in the Middle East was updated on the team’s progress.
Arjay, the engagement manager in Malaysia, had two personal goals for the engagement:
1. To work closely with the client to ensure we did the best work possible (e.g., present strong recommendations focused on the client’s success).
2. To help individual team members when they needed help—and to stay out of the way when they didn’t.

The Malaysian CEO came on board 1 year into the journey. Working with the CEO, we identified and interviewed top executive search firms and helped recruit the first 19 employees.
Until permanent staff were in place, we kept things moving. We collaborated with the CEO to identify which products to offer, how to attract and keep customers, and where to locate bank branches and ATMs.
McKinsey and the client functioned as a single unit through each critical development phase. As managers came on board, we worked closely to integrate each of them and their ideas into the process of creating the bank.
Our competitive analysis revealed weaknesses in existing banks that our client could use to its advantage. For example, early on we went to another bank for a routine transaction. When we arrived, we took a number and then waited and observed. Experiencing the competition’s sub-par service inspired ideas to make the client’s new bank truly distinctive. The client’s bank is completely oriented around serving the customer—from long before the customer walks in the door until after he or she leaves.
We gathered facts rigorously, using focus groups to learn about customer preferences at every step. To help the client map out promising branch locations, we visited different neighborhoods and cities, took photographs, and talked to potential customers. We developed a negotiating strategy for the ATM networks with third parties and the central bank. We visited building after building with real estate agents to find the right place for the headquarters, accessible to airports, hotels, and restaurants. We even helped pick paint colors.
Together with the client, we developed organizational structures and income statements to correspond with projected growth. We set up the IT system with built-in core process advantages, such as streamlined account opening and servicing.
We developed the requirements for integrated marketing and execution, identified potential agencies and prepped the CEO and marketing head to make the final decisions. We also worked with a PR firm to develop launch plans.
All the while, our team focused on preparing the client to take full control at launch. We worked side-by-side with new employees as they joined, mutually benefiting from each other’s varied skills and supporting them until they took complete charge of their respective functions.

Discoveries along the way
We had to change the way we thought about the banking process. Rather than saying something was impossible or has never been done before, we asked each other: Would customers like it? How would it work? Can it be done cost effectively? And then together we found a solution. That led to a series of “firsts,” such as introducing the first combination ATM and debit card with both contact and contactless functions.
The more facts and information we gathered, the more we visited competitors and spoke to potential customers, the more ideas we got.
When we learned it typically takes 5 days for a customer opening an account to receive a debit card and PIN, we challenged ourselves to improve on that. We set a goal to create each card on the spot, so the customer could leave the branch with his or her new card in hand.
Our research led to seven “Innovative Firsts” for the client. For example, the bank relies on automated technology instead of tellers, making transactions fast and efficient for the customer and the bank and allowing the bank to focus on serving customers.
We also discovered the bank could take advantage of the Malaysian national identity cards to streamline the customer experience. The client is the first bank to allow customers to use these identity cards (or any other smart card) to identify themselves by scanning their card at the door. From that point on, they don’t waste time entering their personal information on forms such as loan and checking-account applications, and everyone at the bank can greet them by name.
To achieve these breakthroughs, everyone on the client’s side and McKinsey’s had to change the way we thought about the banking process. We couldn’t be satisfied with the status quo. So rather than saying something was impossible or had never been done before, we asked each other: Can this be done? Would customers like it? How would it work? Can it be done cost-effectively? And then together we found a solution.

The bank’s launch attracted the Malaysian prime minister and drew accolades in the press. The client has successfully expanded internationally and has high public awareness in Malaysia.
The bank is on track to meet its 5-year goals. It opened 12 branches within 3 months and plans to have 50 within 5 years. The bank has filled 300 jobs and has a strong management team in place. The staff continues to develop new products that fulfill the principles of convenience, service, and innovation.
Among the client’s comments:
“McKinsey was very receptive to new ways of doing things. They helped us get away from doing things the way they’d always been done.”
“McKinsey helped us create a professional atmosphere that is non-hierarchical, where ideas are most important. They were very good at creating a culture of empowerment.”
“The wealth of experiences McKinsey brought from other industries was valuable. It helped us see what worked and what didn’t.”
“McKinsey was very passionate about the project and involved in every aspect of the bank. They have high-quality people who were very committed to making the project a success.”

“Working side by side with the client’s experienced leaders and innovative thinkers helped us develop in ways we never expected. For example, I could not have imagined how much I would grow by watching the CEO’s humble yet inspirational leadership. It has had a dramatic impact on me both professionally and personally. We continue to work with the bank, and I am still learning from the bank’s team.”
“When our implementation team made its first presentation to the client, there were half a dozen McKinsey team members in the room and one from the client—the person who was second in command overall and the lead on the new bank. This was the first presentation for one of our team members, a researcher. She had expected only to observe, but the client asked for her opinion, and she gave it. Ultimately, he made his decision based on her thinking. That made a tremendous impression on our entire team. We saw that we had the opportunity to influence an experienced executive, and that he trusted we would give him the best we had to offer.”
“We earned the trust of the CEO, so that we could walk into his office and say, ‘Can I bounce an idea off you?’ to the CEO of a bank!”
“It was an incredibly fun environment where everybody from the junior McKinsey people to the client CEO developed a level of friendship. The head of HR spent time with my wife when we were expecting our first child. She gave us advice on what to bring from the U.S. when we moved to Asia. She even reminded us never to leave the house without an extra shirt in case your baby throws up on you.”
“It is a perfect example of how McKinsey works together with clients in such a great combination. It builds experiences, it builds skills, and it builds friendships that you cannot have unless you work collaboratively with people you truly respect.”
“At the end of the engagement, they threw a very nice lunch for me and bought me presents and showed me the depth of our friendships. I think that contrasts quite a lot with what some people may think of strategy consulting, which is that some CEO walks past and says, ‘Gee, our market share is declining. Go find out why,’ and off you go and do spreadsheets