RBS 2009 Annual Report Download - page 41

39RBS Group Annual Report and Accounts 2009
Divisional review
Business Services & Central Functions
Bruce Van Saun, Group
Finance Director
MFor biographies
see pages 8-11
In 2009, we embarked on a comprehensive ‘Lean’ review of all of our
processes in Business Services. That is now driving one of the biggest
customer focused efficiency programmes ever delivered in RBS. Lean
teams assess the nuts and bolts of our business, and identify and
implement opportunities to eliminate wasteful processes, continually
focusing on how we can improve our service to our customers. We have
embedded Lean thinking in how our people work.
Intelligent Working was another key programme in Business Services
in 2009, looking at how we employ people, technology and property in
a way that makes best use of our assets and at the same time improves
the quality and efficiency of our services. So far, globally, we have
removed nearly 40,000 square metres of office space, equivalent to five
Wembley football pitches.
Business Services also operates well-established and high quality
transaction processing and technology hubs in India and Poland.
The Indian operations hub is a shared service, which supports our
major businesses in the UK, USA, Asia and Europe. Capabilities include
investment banking, trade and payments, retail, corporate and mortgage
back office operations, and technology development functions.
Centralising these capabilities, creating centres of expertise and
deploying ‘Lean’ techniques allows us to increase the efficiency of
the bank whilst at the same time improving the customer experience.
In Technology Services, state-of-the-art but proven technologies such as
desktop virtualisation, IP networking and data centre consolidation are
used to restructure the cost base whilst developing improved levels
of agility and flexibility. During the year, we consolidated the Chicago
based data centre functions (trade and international payment systems)
into the core data centres in Edinburgh. More than 17 million payments
a day and 4.3 billion payments annually now pass through Edinburgh.
By relocating this work, we increased utilisation of our existing data
centre capability and generated economies of up to
£100 million a year of cost savings.
2009 was an intensive year of delivering real change globally in
Business Services, creating new ways of working to improve the service
to our customers. The focus on customers, delivery, collaboration,
investment and empowering our people, gives us strong foundation
stones on which to build.
Central Functions
Risk
We have made significant progress to meet the post Walker Review
requirements for an independent risk function within banks. A Board Risk
Committee made up of non-executive directors is now in place. We have
agreed a revised structure for risk management which will strengthen
areas identified as weaknesses in recent years. These include functional
reporting for the risk function, the appointment of a Deputy Chief Risk
Officer, a Head of Firm Wide Risk and a Global Head of Market Risk, as
well as a Chief Administrative Officer. We have created a new post of
Head of Operational Risk which recognises the additional execution risk
associated with the delivery of one of the largest restructurings ever
undertaken by a bank globally.
Finance
Greater transparency and openness are as essential to the Group’s
journey towards self-sufficiency and regaining investor confidence.
During 2009, we began to deliver highly detailed, quarterly interim
management statements. Analysts and investors have welcomed our
increased disclosure.
Human Resources
To help align our executives’ contribution to delivering our strategic
plans and meet new regulatory requirements, we developed and
implemented a new Executive Performance Assessment (EPA)
framework. The framework is a balanced scorecard approach and
focused on the five key areas of Strategic Progress, Business Delivery
and Financial Performance, Customers’ Expectations, Risk, Efficiency
and Control and People Management.
The EPA framework is designed substantially to improve the quality
of our Executive’s objectives and Personal Development Plans.
Group Strategy
Our Group Strategy team supports the Chief Executive and the
Executive Committee in the development of the Group’s strategy.
Its objective is to ensure that the Group has the right portfolio of
businesses, active in the right markets, supported by the appropriate
allocation of capital and other resources.
Group Communications
Our Group Communications team manages our relationships with
external stakeholders and makes sure we keep our employees informed
about developments in the business. RBS wants to be more open to
stakeholders than we were in the past and during the year Group
Communications helped elected officials, commentators and others to
gain a better understanding of our business and how we plan to return
to self-sufficiency.