Reference case

Setting up and negotiating a future proof commissioning model

Wouter Spitaels Project Manager Financial Institutions Connect on Linkedin
Key Take-Aways
  • Combining a broad network with a strong understanding of the company culture and hands-on mentality results in value-adding solutions
  • Supporting negotiations requires a broad skillset: product-specific knowledge, project coordination and analytical skills
  • Close collaboration between business, finance and risk is required to renegotiate a new commissioning model

The profitability of European banks remains under structural pressure. In the current interest rate environment, banks also face a decline in fee & commission income due to intense competition and extra costs to meet the need for (technological) transformation of business models. This reference case summarizes one of Belgium’s financial institutions’ efforts to control its operating costs by developing a new commissioning model for its branches. Apart from the main challenges and results, it also sheds light on my personal learning points.

Long-standing relationship

The client is one of Belgium’s largest financial institutions focusing on offering a wide range of financial services (i.e. banking and insurance) and personal services to its clients in a reliable and safe way. The client and TriFinance have been sharing a profound relationship for multiple years. As one of its preferred business partners, TriFinance supports the Belgian bank by offering business expertise and pragmatic advice within different departments (e.g. Operations, Data, Loans, Insurance, Finance & Investments).

During previous assignments, I’ve been able to build an extensive network within the client’s commercial, loan and risk management departments. Combining this broad network with a strong understanding of the bank’s company culture and hands-on mentality enabled me to deliver value-adding solutions.

Concluding an agreement between the client and the representative branch owners, after almost one year of development and negotiations, felt very satisfying.

Wouter Spitaels, Project Manager at TriFinance Financial Institutions

Commissioning project encompassing the entire product portfolio

The client has a structure of branch managers who use the bank’s IT infrastructure and products for which the head office and its branch holders receive certain commissions. The client’s old commissioning model, which for example, remunerated branch managers for holding large savings portfolios, put its profitability at risk. Consequently, the client decided to renegotiate a new commissioning model with representative branch managers. Supporting these negotiations required a broad skillset:

  • The commissioning project encompasses the client’s entire product portfolio (i.e. savings, banking, investments & insurance). Consequently, product-specific knowledge was vital to help develop a new commissioning model, build business cases, simulate changes and participate in discussions with business, finance, risk, branch owners, etc.
  • Project Coordination (clear reporting & communication, both internal & external stakeholder management on C-level, D-level and B-level, planning, documentation and story building for negotiations).
  • Commission model changes need to be simulated to estimate the impact on the budget. Analytical skills were necessary to simulate changes on portfolio- and branch levels.

The need for a change in the commission structure was made clear from the start, but it took the client and the representative branch owners almost a year to find a final agreement. The new commissioning model aims to control portfolio remunerations and financially support portfolio growth in line with their strategy.

Renegotiating a new commissioning model turned out to be a tricky balancing act.

Wouter Spitaels, Project Manager at TriFinance Financial Institutions

A tricky balancing act

Renegotiating a new commissioning model turned out to be a tricky balancing act:

  • First, the new commissioning model needs to reflect the client’s growth strategy.
  • Different new ideas to change the current commissioning model are being discussed internally before they are presented to the representative branch owners. All of the internal stakeholders should be on the same page. Therefore, close collaboration between business, finance and risk is required.
  • Apart from the budgetary impact, the legal impact (if any) and operational impact/implementation should also be taken into account.
  • Additionally, the core team needs to verify if the necessary data is/will be available to ensure reporting & follow-up.
  • Once the preferred model changes have been validated internally, the steerco decides on the preferred negotiation tactics.
  • Negotiations result in adaptations, new iterations of internal alignment, (budget-impact) simulations, adjustment of tactics, etc.

Accelerated growth

Concluding an agreement between the client and the representative branch owners, after almost one year of development and negotiations, felt very satisfying. Being a part of this challenging strategic project, participating in C-level discussions & external negotiations, keeping a helicopter view while analyzing and testing new commissioning model specs accelerated my growth as a project manager at TriFinance. I’m thrilled I could leave my mark on this project and share my knowledge within TriFinance. On to the next one!