Updated: Nov 9, 2021
Exclusive Trusted Magazine Q&A with Umair Chaudhary, Group COO of HBZ, and several members from the GCOO leadership team
What’s the transformation vision of Habib Bank AG Zurich and how do you engage your employees and stakeholders throughout the transformation journey?
Umair Chaudhary: When I joined the organization as the Group COO, HBZ had been servicing its customers in 8 geographies for just under 5 decades. Our corporate vision statement was and continues to be “The most respected financial institution based on trust, service & commitment”. The organization takes immense pride in having serviced the previous generations of their customers. But to be the bank of choice for the next generations, a change was needed. It was recognized that to be relevant for the next 50 years, we needed to embark on a transformation journey.
Having been a COO in several other organizations, I knew that this transformation wouldn’t be easy. I realized very quickly, that I would need to understand the organizational culture and work with all the stakeholders of the organization. I also understood that I will need to be very methodical and that a “one size fits all’ approach won’t work, because the reality on the field was very different in all geographies. In my opinion, our transformational success can be attributed to the following five factors:
Leadership: Although I was at the helm of leading the “change”, I made sure that my team members who report to me in the Group functions and the COOs in each country were all doing their part since they have critical roles. Through an aligned vision and clarity on the end-objectives, we always had a partnered approach.
Clear Objectives & Buy-in: Every transformation program has to have a set of defined objectives. Once they are defined, through engagement and communication, you get the “buy-in” of the stakeholders ensuring accountability and participation at all times. Through setting objectives with specific milestones, you measure success, which helps manage expectations. And that is what we did.
Open communication: I am a firm believer in the engagement of stakeholders with transparent and open communication. For every transformational initiative, once the commitment & buy-in was achieved, we constantly engaged and communicated, so that everyone knew what was happening, who was being impacted and what would happen at the end. Communication also ensured that stakeholders felt a part of the process and were kept informed of critical achievements along with any challenges that needed their help to be resolved.
Relentless Focus on Execution: I have often seen great plans fail, because all of management’s attention was focused on preparing the plan, whereas the real focus should be on the execution. As the Group COO, I am aware of the fact that my team and I are responsible for execution and we are absolutely relentless about it.
Celebrating Success: Last but not least, it is important that we celebrate the small & big wins at all times. I am mindful that I primarily manage the back-office functions, whose day-to-day management of thousands of operational activates is not recognized as such, but one mistake can be highlighted all the way to the top. Therefore, ensuring that their transformational achievements are highlighted across the organization is a very important objective for me.
How is “Operational Excellence” fostering Habib Bank AG Zurich Transformation?
GCOO leadership team: We at HBZ believe that continuous improvement can only be achieved with constant self-evaluation, challenging ourselves by raising the bar and having the courage to do what needs to be done. Under the leadership of the Group COO, several initiatives have been undertaken to bring about transformation, implemented by each of his Group Heads managing the different verticals.
The following examples of some initiatives, some of which were initiated in the last few years, will provide an overall understanding of the quantum of change & transformation that has occurred in the organization:
Process improvements are the cornerstone of our operational excellence agenda. As a part of our ‘h-Improvement’ program, we identified various processes, like reconciliation, user access management, payments, vendor management, account opening, import / export, documents archiving, digital customer engagement etc. and implemented changes across the organization. We re-initiated the concept of Service quality because we believe that “what is not measured cannot be monitored”. We also improved our resource capacity monitoring to identify whether our operational teams in the countries had adequate staffing vs. transactional volumes, especially as headcount increase continued to be a challenge. This allowed us to outsource several trade finance and payments services from some locations to our centralized center of excellence in Dubai.
We have continuously improved our technology infrastructure over the last few years. In order to have more resilience, we completed the migration of our data center in Zurich to a state-of-the-art facility, along with a fully replicated back-up site. To provide support to users across the group, a 24 x 7 Network management center (NOC) monitoring team was set-up. Privileged access management system has also been implemented to improve internal IT controls. To standardize our end-points, we implemented thin-clients, which also helped towards our cyber security strategy. We also revamped the local networks in several countries for improved performance.
Being the creator of our own core banking system, we have the advantage of not being dependent on external software providers; hence we have been able to develop several new programs, do internal automation (Straight through processes), and implement regulatory changes with fast turnaround times, through our central Software team. To enhance the governance around projects delivery, we incorporated excellent project management practices and also rolled out a central tool for project and task management, developed internally, for tracking and analysis. This has been extremely beneficial to the organization for improved collaboration and managing customer expectations effectively.
To mitigate technology risk, we adopted a risk-based approach to perform holistic assessments of the threats faced by the Bank. We have made major strides in achieving this on several fronts. Security Operations Center (SOC) was established along with implementing the security information & event management (SIEM) system, which increased operational efficiency while decreasing incident response time by our security analysts. A Data Protection Program, focused on DLP systems is being rolled out across the organization. We also undertook a massive mapping exercise to ensure that our organizational processes / policies are aligned to the different central banks’ requirements. This helped us achieve compliance with NESA for UAE, PRA for UK, FINMA for Switzerland, HKMA for Hong Kong, OSFI for Canada and to State Bank of Pakistan’s IT Governance framework.
Over the past few years, we determined that more focus and attention was required on managing non-financial risks. Historically, as an organization, our focus was primarily on credit risk, while the attention on operational risk & business continuity management was minimal. As a first step, a comprehensive business continuity management program (including a comprehensive Technology Recovery Program) was prepared and rolled out across all the geographies. Having this in place, paid off tremendously last year during the pandemic. Having had dress rehearsals & testing for possible disruption events, allowed us to be fully prepared to serve our customers without compromising on quality of service being provided. We have also implemented other aspects of the operational risk program, which is helping us to proactively monitor & manage risks across the organization.
How is your “early engagement core banking” strategy a key pillar for your customer-oriented solutions?
GCOO leadership team: Having a customer oriented system was not something Habib Bank AG Zurich achieved overnight, but was a journey over nearly three decades. It began in 1994, under the leadership of the late Mr. Reza S. Habib, one of the family members who owned the bank. Knowing the challenges banks face working off multiple systems, which often lead to extensive operational risk, the objective was to have a fully integrated platform supporting multiple products, providing functionalities through various electronic & mobile banking channels. Hence, hPLUS™ emerged as our own unique core banking software, which we manage with an in-house software development team. The system is compatible with newly emerging technologies and advancements allowing it to fully integrate with all renowned 3rd party links, payment gateways, e.g. SWIFT, Bloomberg, Visa, Regional regulatory body’s gateways & switches, etc.
We use our hPLUS™ platform to continuously improve and achieve a high degree of embedded workflows, which has translated into increased operational efficiency at all levels, whilst also seamlessly delivering banking services and Digital solutions to corporations, small–medium enterprises (SMEs) and consumers.
Working capital products are our strength & customers have benefitted from our solutions for trade & payments, which are available to them through Web & mobile banking channels. During the pandemic this turned out to be our biggest strength as it allowed small businesses / companies to continue to operate and carry out business without the need to visit bank premises.
Our trade finance cycle is completely digitalized from start to end. While Trade operations are generally very paper intensive, our customers can apply for opening an import LC with an online application and throughout the process of the transaction, all the documents are available at any time via hPLUS™, with just one button click. Similarly, customers can apply to carry out amendments, withdraw import documents, apply for import financing (trust receipts) and even request guarantees’ issuance, from the comfort of their home or office.
To manage the different processes which are performed by different users in a company, our login management functionality takes care of all combinations and permutations. For example, the person who does the entry in the system can be the accountant, while the authorization is done by the owner(s) / authorized person(s). Also, to keep customers informed, the system ensures proactive communication at every key stage so that the customers (SME / Business) are aware about the progress of their request, allowing them to manage their trade / supply chain more effectively.
Similarly, our e-banking solutions provide access to account details, from the time the account was opened, even if it was 10 years ago. For payments, we have a very easy access to Swift messages; when a customer makes a payment and a MT 103 or MT 700 payment is made at the backend, the swift messages get embedded in hPlus. Customers can immediately access acknowledged swift copies without any delays and thereby provide necessary details to their respective customers pro-actively.
While there are many other such examples, we are continually striving to improve, as we have just embarked on upgrading of hPLUS to its next level for further improvement in operational efficiency and to meet rapidly changing customer demands.