Dutch desks system strengthened
local b
What'sNewS Issue 8'August 1998
The profitability requirements placed on our own rapidly internationalizing branch network - and our commitment to
serve business clients of the local Rabobanks in The Netherlands with their needs abroad - are two important priorities
that have enjoyed an uneasy coexistence until now. What's NewS reports on the changes.
Trade growth
Bank loyalty
Dual goal
Rabo interface
Customer focus
General management in the inter
national offices, under pressure to
meet profitability targets, has at times
been understandably reluctant to arrange
payments traffic, modest loans or advice
for a local banks cliënt because of the low
profitability associated with offering these
services on such a small scale. In other
cases infra-structure, systems, products
and human resources have been lacking.
'Our dual objectives have often created
real dilemmas in practice,' says Henk
Leliveld of control RI, who recently
reviewed the way we
serve local banks'
clients abroad. 'Many
of the Rabobank
offices abroad are not
always equipped to
deal with a large
volume of smaller
clients.'
Henk Leliveld - relieving pressure
However, foreign
trade by Holland-
based clients has in
recent years grown by
leaps and bounds, a
phenome-non most
pronounced in
Europe. There is little
cooling off in sight:
the introduction of
the common European currency, is
expected to add further momentum to
growth and quicken the pace of
investment abroad. The quickening pace
of internationalization is no longer
restricted to wholesale corporate clients
who fall within our cliënt focus sector;
increasingly, small and medium-sized
enterprises that are valued clients of the
local Rabobank network are key players
as well. Like any other business clients,
these players need access to our global
network in order to arrange payments
traffic, gain access to credit in the form of
working capital, investments and specific
project finance, and they also need advice
and information on foreign markets,
regulatory issues, investment climates and
foreign business cultures. What's more,
their overwhelming preference to date has
been to do business with a name they
know and trust: Rabobank.
This loyalty is thus both a strength and a
challenge. Up until now, we have served
these clients with a twin-track policy.
Where the size of the business permits,
they are served directly by our foreign
'Dutch Desks', which
are specific units in
the foreign branch
involving a person or
persons designated to
look after such
affairs. In other
cases, clients might
be referred to an
office belonging to
one of our affiliated
banks abroad, (for
example Lloyds in
England or Crédit
Agricole in France).
By late last year, it
was clear this
approach had its
limitations; indeed,
clients sometimes
even feit as if they
were being turned
away. It was necessary to find a new way
to insure the local Rabobank business
clients had access to the full range of
products and services available through
our global network. At the same time, it
was necessary to relieve pressure on
international offices, who are under
standably focused on meeting their
profitability targets.
In order to meet this dual goal, a new
policy has been approved by the executive
board and is now set to be implemented
by RI and the Eindhoven-based Local
Banks' Division of Rabobank Nederland
(called WAB). 'We decided to keep it
simple,' says Leliveld. 'All of our
international offices will have a Dutch
Desk function. Our branch will provide
what the customer needs. Our alliance
partners may still be involved in pro-
viding those products and services, when
our own branch offices cannot, but in the
future they will do so in the background
rather than directly. As far as the cus
tomer is concerned, the point of contact
is Rabobank.'
To use computer analogy, local
Rabobanks' business customers will
interact with a single, Rabobank-
branded interface in all of their dealings
abroad. It may be that our foreign
alliance partners have a hand in
providing some of these products and
services, but will do so invisibly, in the
background, much like an 'applet' of
enabling software that invisibly
facilitates the performance of some task
on a PC. General managers are being
asked to keep a separate account of the
costs and revenues related to Dutch
Desks. The small business customers will
be served by these desks, irrespective of
whether they meet the profitability
criteria, and the general managers will no
longer be held responsible for the
profitability associated with this service.
'Serving the clients of our entire network
is a priority that crosses any
administrative boundaries within our
group,' Leliveld says. 'The managing
board of Rabobank International and the
executive board of Rabobank Nederland
will agree on a way to cover any asso
ciated costs. The key point is that, if there
is a loss, it will not be taken into account
when the office performance is assessed.
This approach perfectly fits the customer
focus strategy: we create customer value
first, then have our internal discussion on
associated costs,' Leliveld concludes.
