Royal Bank of Scotland, brought to its knees in 2008 and still dogged by bad debt and a tattered reputation, needs to get back to basics and focus on customer service, says CEO Ross McEwan.迷你倉 By Cai HaoxiangASKED about possible job cuts for the 125,000 staff of the Royal Bank of Scotland (RBS), Ross McEwan turns the question to what jobs are needed for the bank to better serve its customers. "I don't think it's a matter of 'what's the number'," says the newly-appointed RBS CEO, who is steering the nationalised British giant through a business review and trying to restore its damaged standing with customers."We need to think about what's important for customers, what are their needs, what would they pay for, and have an organisation that's flexible enough to provide those services at a price they'll pay. That's going to be the next five years for us," he tells BT in a recent interview.For example, the mix of RBS employees will change over time to have more in the front-end departments, and fewer in the administrative and operational back-end functions, Mr McEwan says. "We will reshape our business. Because I need more people at the front of our business facing customers... and more economies of scale at the back."These are the things we are now able to concentrate on given that we're a good, sound organisation again. For five years we've been trying to save the organisation, we're now past that."Mr McEwan, a 56-year-old New Zealander who started his managerial career in human resources, went on to insurance and retail banking, and became RBS's chief executive in October, continues to face a rough road ahead.Despite being slowly patched back to financial health after a dramatic collapse and contentious bailout in the global financial crisis of 2008-9, RBS, a lending giant in the UK, is still dogged by a massive portfolio of bad assets and a tattered reputation.Just last month, the bank suffered an IT systems failure in the UK that left many customers unable to withdraw cash or pay for goods on a busy shopping day. The bank admitted to having neglected its IT systems for decades. A week later, finance chief Nathan Bostock resigned from his post after less than 10 weeks on the job.Right now, accusations on two issues still stand out, related to the bank's troubled past. The first is that after reckless lending in the lead-up to the financial crisis, the bank "swung too hard to one side", as Mr McEwan had put it, and did not want to lend to deserving small and medium enterprises (SMEs), being too complicated and too slow to meet the needs of customers.The second is more damaging, one which Mr McEwan denies. A report by businessman and government adviser Lawrence Tomlinson at the end of November has accused the bank's turnaround division, Global Restructuring Group, of deliberately bankrupting distressed clients to make a profit for the bank.RBS has appointed law firm Clifford Chance to examine these allegations, and has rejected the claims that there was a "systematic" effort to profit from distressed customers, saying no evidence has been provided for this. "The review will investigate the claim fully and I will report back on its findings," Mr McEwan says. "It is vital that we enjoy the trust of our customers and I cannot allow these allegations to undermine that trust."As far as he was concerned, it was time the bank moved on. "As ever with any long and difficult job, a degree of weariness and even defensiveness has crept in. We have got to move on as a company," he told RBS employees in his first message to them as CEO on Nov 1.The way to do so, from his perspective, is quite simple: go beyond cleaning up bad assets, and get to the nitty-gritty of customer service by simplifying transactions, improving processes, and thus cutting down on wasted time and creating efficiencies. Getting these basics right will grow revenues and make the bank profitable, he says."The heart of our performance problem is quite easy to understand: we make it too hard for customers to do business with us and too hard for our people to serve those customers well," he said in his message. "We still receive far too many complaints, often on issues that would never arise if our systems and processes were more effective."We are the biggest backer of small businesses in the UK. Every year we speak to thousands of potential new small business customers but at the moment we don't convert enough of those conversations into actual new loans."And we haven't made the most of the opportunities in our international network by connecting the different parts of our corporate franchise to the needs of our customers."Changing processesFor a start, over the last few months, RBS has cut down the time taken to get new customers onto its transaction platform to five days, down from an astonishing 62 days before."There was no change in the system but we changed the process," Mr McEwan says.On how it once took so long, he explains: "Over time, in any organisation, these things build up and up and people add pieces to it... instead of saying what is it we really need from the customer, what does customer really want, and paring it back to the essentials."Technology can also be connected together to cut down on processes like doing checks on customers. Anti-money laundering checks can be automated. Checks on meeting regulations in each country can all be done in one place.Mr McEwan says he is pushing his staff to do more. "The challenge I have for them is, could you turn the five days to actually one day, or less than one hour, have it completely automated, so customers can sign up and use the electronic or manual platform."It's about pushing the organisation into being simpler and easier to operate. You can do (the process) in front of the customer and have them signed up and ready to go with all the detail and the documentation." Mr McEwan gives another example. RBS is still taking up to five weeks to get an agricultural loan approved in the UK, he notes."To me the question is, why isn't it five days? Why would you make the customer wait that long? There are internal roadblocks of making sure we had the right data correctly, and putting it through a process. There are too many people involved and not enough accountability at the front of the business to put the loan in and get the data right."Maybe only have two people involved rather than five people involved. We've become far too bureaucratic."Good bank, bad bankInefficiencies like these, while having increased costs and frustrations for customers, were not what brought RBS to its knees five years ago.In the decade leading up to the global financial crisis, RBS had embarked on a series of ambitious bank takeovers, growing so big that it became, for a while, the largest bank in the world.Bad bets, such as its purchase of parts of Dutch bank ABN Amro in 2007, weak capital, doubtful assets, an exposure to subprime mortgage assets in the US, and the credit-starved environment caused by the systemic banking crisis in 2008, all mini storageombined to deplete the bank's cash reserves. The British government then stepped in to bail the bank out. Today it has an 81 per cent stake.Despite billions of pounds of asset sales and tens of thousands of job cuts, it was still unclear as late as last October if the bank would survive. Chancellor of the Exchequer George Osborne, the British equivalent of the finance minister, was still weighing whether to break the bank up into a "good" bank - the profitable parts that can be saved and eventually sold back to the private sector - and put its non-performing loans and other doubtful assets into a "bad" bank.The costs and risks of breaking up RBS were eventually deemed too much. On Nov 1, at its third quarter results, RBS announced it would create an internal "bad bank" to hold an estimated ¢G38 billion (S$79 billion) of commercial real estate and troubled loans and to sell them quickly over the next few years to strengthen the bank financially. The bulk of impairments and disposal losses will hit RBS' financials in the years through to 2016, it said.To raise more capital, RBS will also speed up the sale of its US subsidiary, Citizens Financial Group, and targets an initial public offering this year, with a full divestment by end-2016.The risky assets in the internal bad bank, including various loans and Irish commercial real estate assets. should be easier to sell, now that the world is growing. "There's a market for these assets now. People want to buy them. It's surprising how many people are after them," Mr McEwan notes.Meanwhile, costs need to go down from a cost-to-income ratio of 65 per cent, to somewhere in the mid-50s, Mr McEwan says. Results of an ongoing business review will be completed next month, when the bank reports its full-year results.The review, essentially, focuses on the front end, back end, and the organisational structure as a whole.On the front, the bank is finding out that while it operates in 38 countries, its customer base in these countries is not well connected together. Asia is a prime example, where only 10 per cent of RBS' business in Asia is linked to its UK operations. RBS can better support its existing UK customers who trade in Asia, support its Asian clients doing business in the UK and Europe, and attract new customers from Asia who trade in the UK, Mr McEwan says.RBS will focus on its strengths in the debt capital markets, cash management, trade finance, and risk management in foreign exchange and rates, he adds.On the back end, information technology systems and operations functions could work together better. Functions done cheaper elsewhere might actually lead to more inefficiencies."For example, for a transaction account in the UK, somebody at the front could do some data work on it, go to back office, scan it onto India, India would put it onto the system, and it would come back to the front. The question I'm asking is, why doesn't the person just do that at the front, be they sitting in Singapore, Hong Kong, or India."India was cheaper but the problem is you're relying on a back-end process that's not connected to what's in the front," he says. "This is an instantaneous world. You want today a mobile app to do it all for you, you want to see your data right now."Finally, RBS itself is being streamlined to take out layers of bureaucracy and non-core business layers. For example, it had hived off its insurance business to form the Direct Line Insurance Group in 2012. After the company's initial public offering then, RBS had been slowly whittling down its stake. RBS now owns 28.5 per cent, and has said it will sell off the rest of its holdings by end-2014.Now, the bank is looking at "how do we structure the corporate office, across human resources, compliance, risk, any support functions, how do we make them connect to our businesses better", Mr McEwan says.Exciting businessAll this seems daunting. But Mr McEwan says he enjoys the challenge. Born in New Zealand in 1957, he had majored in personnel management and industrial management at university in the late 1970s before beginning his career in human resources in multinationals Unilever, Dunlop, and insurance giant National Mutual. Mr McEwan rose fast, becoming chief executive of AXA New Zealand, which had taken over National Mutual, before he turned 40."I soon realised that I actually enjoyed running businesses, so got into the sales force of National Mutual, then ran the life insurance business in New Zealand," he says. "To me, running a business is the most exciting path. It brings together the dynamics of strong people skills, focusing on customers, and connecting people with other businesses."Mr McEwan then went on to stockbroking firm First NZ Capital Securities, and then the Commonwealth Bank at Australia where he focused on retail banking. He lost out on the top job there in an internal race, but was then poached by RBS in 2012 to run its retail operations.Thereafter, he kept a relatively low profile, until he was asked in mid-August 2013 to replace Stephen Hester, the former RBS CEO who had overseen the rescue job of the bank from 2008 to 2013."I thought it would be a great role to have to follow on from what Stephen had done," Mr McEwan says. "I was very excited about it. I thought we could again recreate a really good bank out of RBS and all its subsidiaries."There is a tailwind that is helping: The British economy seems to be "quietly improving" with unemployment drifting down and corporate activity is picking up, he adds.Ultimately, he sees RBS as a traditional bank, going back to its roots to lend money to customers and protect them from fluctuations. "We're a very big transactions service bank. We move money on behalf of customers. That's what we do very well... We will get most of what we want to achieve (in terms of focusing on the customer) in three years," he says."We focused on saving the bank in the last five years, now we'll put all that energy into the customer."It's all around execution. Many people think, oh it's only IT, oh it's only processes. But you can connect processes with technology and the ability of people."haoxiang@sph.com.sgROSS MAXWELL MCEWANCEO, Royal Bank of Scotland1957 Born in Hastings, New Zealand1979 Graduated with Bachelor of Business Studies, majoring in Industrial Relations & Personnel Management, Massey University, New Zealand1980 Personnel manager, Unilever, NZ1984 Personnel manager, tyre division, Dunlop, NZ1986 Human resources manager, National Mutual, NZ1990 General manager of agency operations, National Mutual, followed by various managerial positions1996 Stanford University-National University of Singapore executive programme1996 CEO of AXA New Zealand, after buyout of National Mutual by AXA2001 CEO of First NZ Capital Securities2002 Head of ASB Group Investment and head of retail bank, ASB Bank2006 Executive general manager, Commonwealth Bank of Australia2007 Group executive of retail banking services, Commonwealth Bank of Australia2012 CEO of UK Retail, RBSOct 1, 2013 CEO of RBS儲存
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