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Banca San Giovanni Case Study

Fransiskus Allan Gunawan – Indra Tangkas PS

I. Introduction
Banca San Giovanni (BSG) is one of the leading banking groups in the Euro zone. Due to its network
of some 6,000 branches distributed throughout Italy, it has a market share of around 15 per cent and offers
its services to over 11 million customers. BSG also has a wider European presence with a network of
hundreds of branches and over 8 million customers in retail and commercial banking sectors. In its recent
business plan BSG declared that it will ‘focus on sustainable growth and creating value by developing
stakeholder trust and maintaining strict control over all management decisions
In order to reduce time per transaction and streamline processes BSG consolidated its high-volume
payment- processing back-office operations, for both retail and corporate clients, into a few centers called
Centralized Territorial Back Offices (CTBOs). However, corporate operations, although using the same
branch network to access its customers, requires a detailed technical and legal knowledge about
commercial contracts, financial instruments, settlement networks and regulations which govern interbank
and supply chain relations.

II. Theoretical Review


1. Runners, Repeaters, and Strangers :
 Runners – are the things you see all the time or processes/actions you use on a daily basis. Say for
example you worked in a call Centre, your runners would be the phone calls you take, the dialogue
you go through with your customers on the phone, the completion of your call sheets etc.
 Repeaters – are the things you see regularly, but not all the time. So, for example, your performance
meetings which happen once a month, the process you follow to deal with an unhappy customer, or
the form you use to return an item to a supplier.
 Strangers – are the things you rarely see or see infrequently. For your boss, it might be the process
they follow to sack someone. If you’re a mechanic, it might be a customer with an
imported 1955 Chevy who needs an original front wing.

III. Discussion Question


1. Compare and contrast the existing and new Payment Operations structures.
Determine the runners, repeaters and strangers in each process:
Service Runners Repeaters Strangers
Banca San  Collect money from one  providing traditional  Easy tracking of
Giovanni party or person and pay lending and deposit movements.
(as is) (transfer) it to another. collecting activities in  Many branches
 Rely on the network of local Italy for retail and integrated for serve 1
banks commercial customers client.
 Payment Operations which  dedicated to corporate
handles the traditional back- clients and financial
office transaction institutions in Italy and
abroad
Banca San  Relationship Manager based  proposing solutions to  Middle Office Client
Giovanni in the branch, together with address both their credit Facing (MOCF)
(new new Payment Specialists needs and investment  Centralized Territorial
payment again based in the main capacity Back Offices (CTBOs).
process) branches  Customize and respond As new strategies of
 RM and Payment Specialists flexibly to client back offices.
must interface with Product requirements.
Specialists in the MOCF
Banca San Giovanni Case Study
Fransiskus Allan Gunawan – Indra Tangkas PS

 Product Specialists will be


grouped together to facilitate
the exchange and
development

According to runner, repeater and stranger analysis, we conclude that this service design type of process also
changes from “Capability” to “Simplicity’. The Volume-Variety Matrix solved as below:

high Decreasing unit costs


Capability' Complexity'

Increase the flexibility


and increase unit costs Increasing
Process by adding back office Process
Variety definition

Low Simplicity' commodity'


Low Volume Per unit High

Process profile between the runner, repeater and strangers based on the “as it” and New payment
operations project are as follow:

2. Does the new structure support Payment Operations’ objectives?


Based on our opinion, the new structure of payment operation has not fully support the objectives of
change the payment method. It is because based on Volume-Variety Matrix answer on number 1,
there was an increasing cost happen when they want to transform the capability process (as is) into
the simplicity process. In order to fix the cost issue, the strategy of transformation payment process
in order to meet the objectives is as follow:
a. building capability through systems and training
b. building capability through incremental development
Banca San Giovanni Case Study
Fransiskus Allan Gunawan – Indra Tangkas PS

c. moving to a commodity by constraining flexible resources


d. Moving to a commodity through investment in process capability.

3. What do you consider to be the benefits and challenges posed by the new structure?
The benefits of the new structure:
a. Leveraging knowledge about customers. Information systems in back office ensure that
customer-facing employees have all relevant information about the customer available during
the service transaction present a more professional image, and allow the core transaction to be
conducted more efficiently.
b. Augmenting the service: Technology may allow the service provider to carry out more for the
customer. This is not only the back office simplified the system of customer process in bank, but
also decrease the waiting time on which the service provided.
c. Increasing customer control: Due to the simple process received by client, the client emotion
will always in positive situation. Even though in the process there is a gap (waiting) process, but
it is only a small part of influencing the customer emotions.

The Challenges of the new structure implementations:


a. Increasing the cost: Even the process more quick, but to facilitate these change need more fixed
cost to transform the partial process of transactions. So, it need a budgeting control for reduce the
increasing cost efficiently.
b. Market-Operations Gap: because of Change the nature of the service, not every customer will
suitable to the methods provided by Banca San Giovanni. So it need the periodical transformation
in order to satisfy the customer.
c. Change customer expectations. All organizations need to try to align customer expectations
with the nature of the service. If it is a high-volume, low-touch process it is important to educate
customers not to expect personalized service. This is a potentially disastrous strategy, with the
organisation running the risk of long-term damage to its reputation and relationship with its
customers.

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