FirstRand has changed its internal operating model such that services offered by well-known businesses – including FNB, RMB and Wesbank – will be grouped and managed under three distinct customer segments: Retail, Commercial, and Corporate and Institutional. Externally, however, services will continue to be delivered through its market-facing businesses and customers won’t notice any difference.
FirstRand’s new internal operating model
In his CEO report in the FirstRand 2018 Annual Integrated Report, Alan Pullinger says the change is in line with the group’s objective to become a fully integrated customer-centric financial services provider. “The group believes that real customer centricity is necessary to effectively deliver integrated offerings. Where the group was previously structured around business silos, it has now designed a model structured around customer segments – i.e. putting the customer at the centre of business.”
He goes on to explain that the product and segment-neutral enablers are mandated to:
– extract efficiencies by removing/avoiding duplication;
– run independent transfer pricing and cost recovery principles to ensure neutrality; and
– ensure collective decision-making involving all segments.
The group says FNB now operates in the Retail and Commercial segments, RMB in the Corporate and Institutional segments, and Wesbank across both segments. Aldermore, its recently acquired UK business, and rest-of-Africa operations will not be affected by the change.
Despite the internal changes, the likes of Jacques Celliers, James Formby and Chris de Kock remain CEOs of their respective customer-facing businesses FNB, RMB and Wesbank. “They all remain prescribed officers of FirstRand, they all sit on the group Stratco and all continue to report to the group CEO, Alan Pullinger. Therefore, their remuneration remains on the same basis as before,” the group said in response to Moneyweb’s questions.
Adrian Cloete, a portfolio manager at PSG Wealth, says the new internal operating model will likely improve the overall customer experience. “It will have an overall picture of what each customer does and will be able to appropriately service their needs. It also makes sense in terms of accountability as one person will be responsible for making sure that customers’ needs are fulfilled.”
The group intends to use insights gleaned through a single view of each customer to better collaborate across businesses, channels, platforms and products to service customers.
FirstRand says the restructuring is not expected to impact headcount as it is designed to drive growth, efficiencies and better customer propositions rather than cost reductions.
It sees significant growth potential in transforming into an integrated financial services player by leveraging its banking capabilities and distribution network. “The group is incrementally capturing a larger share of profits from providing savings, insurance and investment products to its customers and the growth opportunity is significant given the annual flows to other providers from FNB’s customer base alone,” Pullinger says in the report.