Performance Improvement in the Private Sector
Absa was formed in 1991, through the amalgamation of three South African banks, adopting a single brand and corporate identity as a financial services group by 1999. Its Retail and Business Banking (RBB) division provides personal and business services, including home loans, everyday banking, and vehicle and asset finance, as well as more recent offerings in customer value management and unsecured lending.
By 2019, a challenging economic environment was affecting RBB’s customers, increasing missed or delayed loan repayments, while also decreasing the value of recoverable assets. Taken together, greater delinquency was increasing the bank’s impairment charge, putting pressure on the bank’s cost-to-income ratio.
RBB’s Collections function was ill-prepared to respond effectively to this additional burden, having for years been neglected as a focus for investment. Its 1,250 employees felt disengaged and undervalued, manifesting in unplanned leave and attrition, which reduced further RBB’s capacity to deal productively with its collections challenges.
PwC was engaged in January 2019 to help reverse this decline. RBB needed to improve operational control of Collections, empower its staff and increase their engagement, and achieve an increase in annual cash collection of 5%.
PwC’s solution was centred on Perform – its methodology for rapid operational improvement through behavioural change – and enabled by its cloud-based Perform Plus platform. Perform Plus marries Perform’s hands-on coaching programme with smart technology, greater data-processing capacity and advanced analytics.
By teaching the leadership team new skills, PwC aimed to co-solve RBB’s strategic problems, including enhancing the effectiveness of call handling, reaching avoidant customers, automating rule-based tasks, and visualising key data sets to generate insights.
PwC created a multidisciplinary project team of 65 specialists, selected from across its UK and South Africa firms, and Absa, with skills that spanned cultural change, data analytics, IFRS9 reporting standards and business recovery. This breadth and diversity of knowledge meant PwC could take a holistic view of the situation, from recognising the internal strategic and cultural issues, through to understanding the nuances of individual customer relationships.
Using the Perform methodology, PwC deployed a programme of weekly training sessions, in two 12-week blocks, to give each of RBB’s 127 leaders a world-class operational toolkit. Perform brought a structured and collaborative approach to problem-solving, helping PwC work with the leadership team to identify and remove the strategic obstacles to better performance.
Meanwhile, all 1,250 staff were brought onto the Perform Plus digital platform, helping them to identify and resolve tactical problems on a day-to-day basis. As a cloud-based service, it meant everyone in the team could remain connected, engaged and supported whether they were working from the office, at home, or in the field.
This successful project gave RBB’s leaders the ability to take operational control and realise benefits beyond the programme’s completion. The PerformPlus platform now facilitates hundreds of conversations a day around a suite of over 6,000 individual KPIs. The project led to a 12% increase in cash collection, against the 5% target, and a 10% increase in productivity of non-cash collecting teams, achieving a return on investment of 6:1.
View the PwC profile in the MCA Members Directory.