Retail Banking in CEE: Exploiting the Potential of ... - Roland Berger

SUMMARY – RECOMMENDATIONS FOR "MICRO COMMITTED" BANKS 41
DOS AND DON'TS
As a result of the interviews conducted and of Roland Berger's relevant project experience,
the major dos and don'ts were summarized (see fig. 35) for banks that plan to
focus on micros.
Banks have tried different
approaches to micros but just a few
of them turned out a success for
multiple reasons
FORECAST
Based on more than 50 interviews with CEE bank representatives, the resulting forecast
for the coming two to three years can be summarized in the following six points:
1. The majority of CEE banks will strengthen their micro business focus for the
above described reasons.
2. In countries with a still high share of grey economy, the micro focus increase will
probably be delayed by some years: micro owners there are still in the capital collection
phase and are not willing to make their wealth transparent.
3. Each bank has strengths and weaknesses in terms of micro maturity. (In the study,
interesting models were introduced amidst case examples.) Soon, most of the
banks will at least assess their own strengths and weaknesses to lay the foundation
of a proper micro strategy, having recognized the correctness of this assessment to
be extremely critical for the success of the following years.
4. Banks will not attack micros immediately because both operational and risk cost
have to be predicted precisely. Currently most of these data are either not available
or not detailed on the required level. Their elaboration takes at least months
but often rather quarters (e.g. segmentation and service model).
5. As a result of the crisis, banks have generally become more conservative in lending
since 2008, although loans are essential in any segment to grow. Elaborating a
trustful micro scoring model will likewise take quarters at least.
6. The already mentioned conservative approach will motivate banks to first collect
experience in some selected sub-segments (think-big-start-small approach) and to
gradually extend the scope with further sub-segments.