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Leveraging Technology to

Advance in Business

Eray Yuksek

Change Journey of Garanti

Harvard Case Study


Garanti Bank: Transformation in Turkey
by Rosabeth Moss Kanter, Daniel Galvin, Maximilian Martin
Publication date: Apr 05, 2000. Prod. #: 300114-PDF-ENG
Discusses the complete transformation and turnover in every division of
Garanti Bank. Describes the multiple change projects managed and
cross-cultural issues confronted during the 1990s and the organizational
challenge of transforming Garanti Bank into one of Turkey's premier
financial institutions

Garanti in early 90s

Mid size commercial bank


Total 317 branches
Market value was $150 million
Total active assets $1,6 billion
5,900 employee. %32 of employee university graduates.
11 levels in organization hierarchy .
Bank organization is based on products and functions
rather then customer
Issued 43,000 credit cards.

Garantis Change Journey Road Map


The challenge of the change at Garanti has been to create a culture which is completely
opposite f the culture prevalent in Turkey. The change was decisive - we had to move fast,
and those who could not come to accept the change, were left by the wayside. From the
inside out, the view was sometimes chaotic, but it was a systematic chaos.
Y.Akn ngr Ex CEO, Garanti

Key factors driving innovation and


change
Changing customer expectations

Changing the concept of banking


from money management

to financial services to meet


customer needs

Market conditions
Need for relationship banking

The Vision

Market share and profitability

Garanti should become a financial

IT revolution

supermarket

Growth

Garanti should stand out among the other banks


in delivering customers what they need and
not what the bank can offer

Globalisation
Anticipation of a macroeconomic environment
characterised by lower inflation

Therefore the bank has to focus on customer

satisfaction
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Garantis Change Journey Road Map


Strategic change projects...
1992
1992

1994
1994

1998
1998

1996
1996

Cash Service
ADC
Branches
CRM
Commercial
Reshaping
Banking
Branch
Acik
Network
Corporate
BPR

Central
Banking
Foreign
Regional
Trade Ops
Ops

Segmentation
Center
Credit Culture
Investment
Centers

Retail
Banking

Branch
Redesign

2002
2002

2000
2000

Abacus

IT and
Central
Operations
Unification
SME

2004
2004

2007
2007

SES
Segmentation
EVA

Mergers

Retail
Segmentation
Affluent
Banking
Code of
Commercial
Sales
Segmentation
Retail Service
Model

... enabled by advanced technology

Customer system Network design &


impl.
POS

MS Windows impl.
IVR
Paralled Sysplex
Central database
Cheques image
recognition

Development tool
selection
IBM FDM, BDW data
models

MS Exchange & NT
impl.

Advanced queue
mgmt.

Datawarehouse impl.
Fax integration

Image processing
&recognition

Electronic
workflow
Datamining
MR-single version
of truth
Customer
profitability
CRM & propensity
modeliing
IMS/DB to DB2

Sales mngmt tools


Financial Analysis
Report

Java based internet


and call center

application
Campaign

management
Budget system

Cardless
Garanti Romania
transactions
Coin dispensers
Pocketbank
Blackberry
applications
Data capturing and
recognition

Garantis Change Journey Road Map


Strategic change projects...
2008

2009

Loan
Process
Mobile
internet
branch IP Contact Center
Risk
management Video
Logo entegration
Fraud
3G applications
management
Legal Follow up
Collection

Garanti, Integrated Financial Services Co. Focused on Retail

Retail

Affluent

Upscale

Payment
Systems

Corporate

Commercial

Garanti Bank caters any financial need of its


customers with having a presence in all business
lines including corporate, private, commercial,
SME, retail and investment banking.

SME

Medium

Small

Mass

Mass Market

Financial Subsidiaries

Garanti operates as an integrated financial services company with


its nine subsidiaries offering service in payment systems, pension,
leasing, factoring, brokerage and asset management

Turkish Banking Sector - Assets & Major Players


Top Private Banks by Asset Size 1Q 2011
Foreign
ownership
%

Total Assets (US$ bn)


CAGR: 21%
613 633
519
468

450

337

25.01%
Top 10
Private
Banks:
64%

288

20%
40.9%

217
170
127

94.73%
State
Banks:
32%

99.84%
61.93%

2002 2003 2004 2005 2006 2007 2008 2009 2010 1Q11

100%

100%
33.98%

Garanti - Pre-eminent Banking Franchise


Total Assets

US$ 90 bn
Q1 2011 Net Income

US$ 597 mn

Integrated financial services company


Technologically advanced, innovative and dynamic
Customer-centric growth model, key focus on
profitability and asset quality
Ownership structure:
Jointly controlled by Dou Group and BBVA

Branch Network

893

51% in the free float

Asset Growth
Customer Number
US$ Billions

>10.1 mn

CAGR: 26%

100
90
80
70
60
50
40
30
20
10
0
2002

2003

2004

2005

2006

2007

2008

2009

2010

1Q11

Leveraging Technology to Advance in Business


Garanti has differentiated itself from others by information Technology...
A wholly-owned subsidiary of Garanti Bank.
One of the largest IT service providers in Turkey. (900 employee)
Creates tightly integrated and fully in-house developed, custom-fit IT solutions
Focused on banking and financial services
IT services with state-of-the-art information technology
Well-reputed as innovator and visionary
Business & IT
Alignment
Innovative customer oriented products and services
Best customer relationship management solutions
Alternative Distribution Channels
Centralized operations
Business Intelligence solutions
Garanti with $90 billion asset size, is recognized for the 11th time as the
Best Bank in Turkey by Euromoney

Design Principles and Key Features


24x7 Real-time on-line application

Banks continue to process business seamlessly as End of Day processing is not a


necessity; it is just for backups, interest accruals and MIS populations.

All updates and inserts are done in real time including Accounting

Modular yet fully integrated solution

Integration at database level. Not Siloed applications

Single Customer View


Compliance with regulatory requirements

Easy of use. Different application views (portals) for different


user roles

Design Principles and Key Features


Scalable
The state-of-the-art 3-tier architecture has the capability to handle
high volumes of transactions from large number of users across
multiple channels and modules.
The architecture ensures consistent high performance and quick
response times

Multi Currency
Channel
Lingual
Country

Strong Distribution Channels . All channels use same back-end applications for
business logic and database access.

Banking System Architecture

All channels are serviced by in-house developed software and by the same host system
Channel
Management
Fax

SMS

IVR

Document
Management

Banking
Application
Process
Automation
Image Processing
Credit Cards
Acquiring
Credit Cards
Issuing
Commercial
Loans
Consumer
Loans
Foreign Trading

Accounting

Call Center

Smart
Phones
Securities and
Treasury
Cheques

EFT / SWIFT
Payments
Cash Delivery
Management
Fee and
Commission
Budgeting
Teller

Risk Managemnet

Business Reporting,
Business Intelligence

Customer Information System

Software
enabling
central
operations
Collection

Tightly integrated
Developed in-house
Single customer database
Integration at the data level

Mobile
Devices

WEB

eMail

POS

ATM

Branch Office

Security System, Fraud & AML

Technology Infrastructure

Intel
servers

Windows
clients

Client
Appl.

Fax
SMS

Internet
Infrastructure

Workflow

Client/Server applications

Z196
717

Web Based Applications


Internet
banking

Document
Management

Payment
Systems

z/OS

Mobile
Devices

CICS

DB2

Unix
Servers

Parallel Sysplex Architecture

Contact
Center

.NET
Applica.

Application
Servers

Oracle
MS SQL

Virtualization & Consolidation

Systems management

Central
Operations

Kiosk

ATM

Service Level Management

HQ
Regions

Branch

Network Management

Video
systems

Voice
systems

Mobile

IT Security
Operations

DW and Datamining Business Intelligence

Digital
capillary
network

Digital
backbone

Office
Appl.

Disaster Recovery

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Garanti - Multi-Channel Distribution Network


Online Banking
~1.8mn Internet Bank Active
Customers

Branch Network
893 Branches
Presence in 76 Cities:
94% Geographic Coverage

>750k Log-ins Daily


~13 mn Transactions/mo
Recognized As Turkeys Best
Internet Bank

Contact Center
ATM
3,160 ATMs
19 mn txs/mo
Cardless Transactions
Coin Dispenser
1.1 mn logins on peak
days

Mobilebank
1st in the World to Allow
Money Transfer Via SMS
223k Users
wap.garanti.com.tr --1st
internet bank access via
mobile in TR w/o application
downloads or activations

4.6 mn Calls/mn
>1.1 mn active customers
14 seconds: avg.
response time
256k Sales/mo

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Garanti Technology - Integrated to our Daily Business


Cepbank the first application in the
world that provides money transfer
service by mobile phone (2005)

Bonus Card Turkeys first chip-based


and multi-branded credit card.(2000)

Flexi Card Worlds first flexible credit card,


which allows for the customization of all
parameters including financial and visual.(2005)

Bonus Trink the PayPass


featured credit card with
contactless chip technology.
(2006)

Paperless banking Worlds first


ID-scanning application has created
a paperless branch, which offers a
shareable, easy-to-access and soft
branch environment (2006)

Cepubesi the mobile branch


was launched (2007)
Garanti Mortgage the
first mortgage call center
with IVVR system in the
banking sector, enables
customers to have a video
call. (2008)
Money Card Turkeys first credit card
which is multi-branded and also offers
brand-specific loyalty benefits (2009)

BonusluAvea Launched the worlds


first NFC (Near Field Communication)
payment enabled SIM card (2010)

Golden Bonus Card the worlds first


gold - saving credit card (2010)

Extensive Business Performance Monitoring


A single source of data is
created to establish a common
understanding across the bank

Management information is
provided at all levels for
performance monitoring
Bank level
Business line level
Region level
Branch level
Sales person level
Customer level

Customer
Profitability

Single data dictionary


Standardized management reports
Consolidated data integration into
management reporting platform

Single
Version of
Truth

Platform for management and


legal reporting

Budget
Planning

IBM BDW data model is used in designing DW


Business Intellligence (Datamining) projects with IBM team
Management reporting and CRM projects with IBM team selected as
finalist in IMS 2001 London event
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Performance Figures for Systems and Operation


Number of Transactions / Day (mio.)

91

2007

142

2008

Average daily txs.


Peak daily txs.

150

198

Average Internet trx/ Month (000)

215
8,286

2009

2010

2007

2011

: 215 million
: 270 million

9,967

2008

11,327

2009

11,690

2010

12,640

2011

Internet Average trx/month


: 12,640,000
Internet Logins/day on peak days :1,209,639
Internet Average response time : 30 msec.

Average response time: 0.042 sec.

End to end average response time


(second)
0,39
0,31
0,09

0,095

Operation Investment
center
centers

0,12
Branch

POS

ATM
withdraval
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Disaster Recovery service from IBM


ZMR IBM Site

STANBUL

GDPS (Geographically Dispersed Parallel Sysplex)/ XRC (Extended Remote Copy) solution
Compliant with GBs Disaster Recovery & Business Continuity plan
25,5 TB total transferred disk size, 4.7 TB daily updated data
Two test slots per year

Istanbul
Izmir

565 km away from istanbul


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VIDEO BY TUFAN ALATAN EVP GARANTI TECHNOLOGY