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Group Technology
2009 in review
With the global and local recession taking full effect during 2009, Group Technology faced very different business requirements (eg flexible and stable debt collection processes and systems) and constrained innovation budgets to maintain service levels to the business clusters while servicing demand for infrastructure improvement and innovation projects. This increased the scale and complexity of the group’s IT environment.In terms of IT Infrastructure and Operations the following volumes and services were supported by Group Technology during 2009:
- Group Technology processed on average 5,6 million financial transactions daily across 429 systems in its mainframe and UNIX environments. Over 33 500 online and batch programs were run daily.
- Efforts to arrest Microsoft server growth have been successful, resulting in the decommissioning of nearly 300 servers, leading to the first year of net negative server growth since the inception of Microsoft server technology.
- A total of 28 900 personal computers, 11 700 printers, 52 500 voice devices and/or ports and 75 600 data connections were supported. In the self-service environment 1 874 automated teller machines, 379 self-service terminals and 42 500 point-of-sale devices were supported.
- The operational quality of service was improved for the fourth consecutive year. Serious outages and service disruptions decreased in number by 33% and in time impact by 39% over 2008.These improvements were achieved despite deploying a significant amount of change into an increasingly complex technology landscape.
- No environmental issues were experienced due to power outages at our primary and secondary data centres throughout the year.
- Benchmarks conducted during the year in the mainframe, midrange, Wintel server, storage, end-user computing and other infrastructural areas continued to reflect Group Technology as a cost-effective service provider compared with local and international companies.
Compliance, risk and fraud containment remained a key focus, and it is expected that the demands for improved innovation in these areas will continue to rise. In 2009 the market experienced a continued increase in internet fraud attempts, primarily through phishing attacks. A well-defined phishing response process remained effective, ensuring that Nedbank’s losses were well-contained.
Prospects for 2010
Group Technology will continue on its path to become the business clusters’ preferred technology partner and outperforming relevant industry benchmarks. The Group Technology business strategy for 2010 through to 2012 has been shaped to drive significant improvements in:- Closer alignment with business divisions and clusters to ensure greater end-to-end accountability by functions in Group Technology and improved agility in delivering services and innovation projects.
- Project prioritisation directly to reflect not only positive business cases, but also meeting group strategic targets in the longer term and ensuring advancement of the technology architecture.
- Group Technology’s performance in 10 key areas through a Strategic Improvement Programme (SIP). SIP will consist of around 30 subprojects aimed at measurably and significantly improving Group Technology’s performance in areas that further its mandate and group needs.
At the same time Group Technology will continue to build Nedbank Group’s future IT landscape, guiding threeyear technology and business-aligned roadmaps. This will assist Group Technology in its continuous quest to provide flexible and cost-effective IT solutions that evolve quickly and easily to suit the requirements of Nedbank Group’s business clusters.
Group Strategy and Corporate Affairs
GSCA review of the year 2009
The group’s marketing programmes in support of building the Nedbank brand were successful in 2009. The improving brand equity growth trend of recent years was continued and indeed accelerated, and the gap between Nedbank and its competitors continued to narrow. Nedbank’s major sponsorships continued to play an important role in the profiling and building of the brand and consumer engagement. The new soccer sponsorship property – the Nedbank Cup – surpassed all expectations in its second year, and independent research revealed it to be the most impactful soccer sponsorship of the year in South Africa. Our ‘green’ positioning programme was given a high profile, and succeeded in retaining the high ground in this domain for Nedbank. The Nedbank Affinity Programme proved to be resilient in extremely tough market conditions, showing above-average growth relative to non-affinity products.Nedbank Group concentrated on the deliverables in terms of the Department of Trade and Industry (dti) Codes by publishing its verified black economic empowerment scorecard. This is a first in the financial industry. In addition, Nedbank Group has continued to drive the agreed targets for 2016 in all elements of the scorecard in conjunction with all areas of the business.
In the light of the deteriorating global and local landscape, economic comment, insight and advice continued to be sought by both internal and external stakeholders. GSCA continued to refine the group strategy, with specific emphasis on scenario planning with the Nedbank Group board in the uncertain environment.
The Nedbank Foundation won the National Business CSI/SED Award 2009 and Nedbank was recognised as the Social Responsibility Bank of the Year 2009 in the African Banker Awards. This acknowledged Nedbank for its commitment to the communities it serves. Nedbank Group’s total financial contribution to socioeconomic development amounts to R59,5 million for the period under review.
Outlook
A decision was made to split the cluster into two separate clusters, effective January 2010:- Group Marketing, Communications and Corporate Affairs; and
- Group Strategic Planning.
Group Marketing, Communications and Corporate Affairs
prospects for 2010
The Nedbank brand-building programme will build on the very successful strategy of recent years, but with added emphasis on certain selected market segments and increased focus on the brand’s direct client value proposition.Careful campaign management and marketing communications coordination in the context of the 2010 FIFA World Cup schedule will ensure optimisation of the bank’s presence and consumer relevance in a unique and challenging year.
The 20th anniversary of The Green Trust will provide a platform for the continued projection of Nedbank’s environmental and community leadership aspirations.
Internal and external stakeholder engagement and media relations will be optimised.
Nedbank Group is committed to the institution and promulgation of an industry/sector code to replace the Financial Sector Charter. Nedbank Group is also committed to delivery on all areas that form part of the Financial Sector Charter but are not included in the Department of Trade and Industry (dti) Codes of Good Practice.
The set targets will continue to serve as a minimum guideline for our transformation activities across all elements of the dti Codes, while engaging fully with all stakeholders to ensure sustainable transformation in all areas of the business.
We will continue to leverage the strong relationship with our black business partners, the Wiphold and Brimstone consortia, and our black development partner, Aka Capital. Our partners add value in areas of common strategic initiatives and will continue to provide insight into transforming our business.
In the Nedbank Foundation we will continue to improve our processes to enhance turnaround on requests, implement the concept of holistic communities that will enable us, together with various partners, to make a significant sustainable difference in all the communities in which we operate, and continue to expand our efforts to make a real difference in all areas of involvement.
Strategic Planning
prospects for 2010
The Nedbank Group strategy and strategic planning process will continue to evolve and be improved through concise articulation of strategy at a group and cluster level.Strategic Planning’s Economic Unit is highly regarded for the quality of independent economic insights and research that it consistently provides to both Nedbank Group and its clients. Research provided by the Economic Unit forms an integral part of Nedbank Group’s strategic planning process referred to below.
Strategic planning in 2010 will be centred on the challenges and opportunities for Nedbank Group, including:- improving the profitability of the Nedbank Retail cluster;
- improving Nedbank’s non-interest revenue, particularly through Nedbank’s bancassurance activities and improved cross-selling in other areas;
- increasing the number of new primary clients across all clusters and maintaining existing primary clients through improved value-added services;
- building on Nedbank’s inherent strengths and substantive market share in the wholesale and business banking sectors;
- responding to opportunities arising from increased broadband and mobile banking accessibility and seeking innovative ways to expand Nedbank Retail’s distribution network;
- optimising the allocation of capital to business activities through the business cycle in order to grow businesses with high forecast economic profits and anticipate activities that are vulnerable to large cyclical impairments;
- utilising international expansion opportunities within the Southern African Development Community and the rest of Africa within acceptable risk limits; and
- building on Nedbank’s leadership in the transformation, corporate social investment and environmental spheres.
Group Human Resources and Employment Equity
Review of the year
We believe that great things begin with great people and owing to the economic climate and the changes to the business, 2009 was a year of unrelenting focus on our employees, their development, retention, and the culture and climate in which they operate.The challenges for 2009 were much the same as for 2008 in addressing the shortage of key skills, attracting and retaining great people, ensuring effective tools to enable high performance, and making progress with transformation, with the addition of major changes to the leadership team and business, as well as the global economy. Based on the composition of the 2010 Executive Committee (Exco), Nedbank will have 44% black representation, the second highest among the top four banks, with the highest African (38%) representation compared with our peers.
The HR 2010 programme commenced in 2008 and continued to gain momentum in 2009. Improving efficiencies and effectiveness are the two main thrusts of the HR 2010 programme, undertaken in conjunction with Deloitte and designed to run until December 2012.
In November 2008 the Nedbank Group Exco approved the HR Service Delivery Model, which acts as a blueprint for HR to provide end-to-end HR services to the organisation. With this model in place a top level of HR reporting was developed and approved.
The HR 2010 programme progressed through two phases that encompassed a 12-week design period. The result delivered the following:- Developing a business case for implementation.
- Revising the high-level design.
- Defining a functional organisational structure for the selected Centres of Excellence Model.
- Defining the decision framework.
- Revising the costing based on three- year efficiencies.
- Developing role profiles, including behavioural and technical competencies.
- Developing a workforce transition plan.
- Mapping HR processes.
- Developing a Responsible/ Accountable/Consulted/Informed (RACI) process matrix.
The approach has been consultative and has included input from HR executives, HR subject matter experts and line HR. Implementation (phase 3) commenced in July 2009 and progress against the project plan has been satisfactory. Savings have been identified and applied to the three-year business planning process. In addition the journey to upskill the HR community will commence in earnest in 2010, together with exploring other enterprisewide HR efficiencies.
One of the key pillars of the optimisation of HR was to review the delivery of HR services. Subsequently, HR embarked on a restructuring process that supports the Centres of Excellence Model. This restructure resulted in HR adopting a new operating model consisting of centres of excellence and line HR. The centres of excellence consist of the following centres:- Organisational Development
- Industrial Relations, Organisational Transformation and HR Compliance
- Rewards Management
- Talent Management
- People Development
- Office of the HR Group Executive
Click here to read the full Group Human Resources and Employment Equity in the 2009 Nedbank Group Annual Report.
Balance Sheet Management
Overview
Established as a separate cluster in August 2009, BSM helps to optimise the financial performance, strategy and sustainability of Nedbank Group through proactive management of all material components of the balance sheet.Since the business of banking is fundamentally about measuring, managing and optimising risk, BSM, in addition to supporting the vision of making Nedbank Group a great place to invest, also champions the group’s deep green aspiration to be worldclass at managing risk and its three core objectives for successful enterprisewide risk management, namely management of:
- Risk as a THREAT
To minimise and protect against downside risk, protect against material unforeseen losses and maximise longrun sustainability.
- Risk as UNCERTAINTY
To eliminate excessive earnings volatility and minimise material negative surprises.
- Risk as OPPORTUNITY
To maximise financial and share price performance upside via application of superior business intelligence, management science and shareholder value-add economics, while optimising business opportunities, risk, capital and liquidity ultimately to differentiate against competitors. A core objective within BSM’s role is thus leadership in the application groupwide, of best practice and integrated risk, funding, ALM, capital and shareholder value-based management, within an acceptable risk appetite and with a strong qualitative overlay of experience and common sense.
The BSM cluster is the central consolidation point of risk, capital and liquidity across the group, and therefore its role includes group portfolio risk management, recognising that optimising risk, funding, capital, financial performance and sustainability of the group is not just about a simple aggregation of the client-facing business clusters.
Click here to read the detailed Risk and Balance Sheet Management Report in the 2009 Nedbank Group Annual Report.
Group Risk
Review of the past year
Despite unprecedented global volatility, the SA banking industry has remained structurally sound. Although banks have experienced cyclical financial stress as a result of the economic downturn, Nedbank Group has proven resilience. Risk management, more than ever before, has become a focal point to avert risk exposure and to manage and sustain business better. With this realisation the important role that risk management has to play is reinforced.In response to the economic instability management significantly reduced the risk profile of the group to ensure sustainability and increased proactive risk management. This resulted in tighter credit lending criteria within the Retail and Business Banking sector of the business, more stringent risk acceptance criteria, stronger emphasis on improving collections efficiency as well as increased affordability buffers. Similarly, the strategy for the Nedbank Corporate cluster included active management of clients with large exposures, tightening of controls on international trade and transactions, and a review of high-risk industries to identify specific areas of stress so as to develop early warning signals and prompt proactive client engagement in affected industries. In addition, stress testing on share-based exposures in order to manage security levels formed part of this derisking strategy.
As testament to Nedbank Group’s effective risk management programme the group was recognised at the recent Institute of Risk Management South Africa awards as a runnerup for the most effective risk management programme for 2009, having been the winner in the previous two years.
Outlook
Through the annual strategic business planning exercise Group Risk identified eight focus areas for the year ahead as aligned with the strategic focus areas for Nedbank Group:- Manage for value through the cycle
– This will be achieved through a continued focus on sound capital and liquidity management and managing credit through the challenging credit cycle.
- Step change in non-interest revenue growth
– During this period where business is required to focus on increased innovation to achieve growth of non-interest revenue sound risk principles will be strictly maintained.
- Become client-driven
– As an enabler to business, one of the ongoing objectives of the central risk function is to embrace new and existing legislation and internalise and operationalise regulations in the course of normal business operations. During this process maintaining strong relationships with key stakeholders, including the board, regulators and shareholders, is of paramount importance in preserving the reputation of Nedbank Group.
- Manage risk as an enabler
– Improving on forward-looking analysis will ensure that the group is wellpositioned proactively to identify and manage risks within the ongoing uncertain and volatile environment.
- Enhance productivity and execution
– Business process engineering will be initiated to identify early recognition of potential threats with the aim of implementing new and appropriate controls further to enhance the strategy of proactive and dynamic risk management.
- Maintain strong risk management culture for competitive advantage
– Maintaining a strong oversight of the group’s Enterprisewide Risk Management Framework will continue to place a strong emphasis on accountability for managing the group’s identified risk universe.
- Accelerate transformation
– Managing transformation risk, which forms part of the Nedbank Group risk universe, remains an area of priority in developing a black talent pipeline to meet future growth requirements and ensuring that Nedbank Group contributes positively to the wider context of South Africa’s transformation.
- Lead as a corporate citizen
– All business undertakings will continue to be aligned with Nedbank Group’s position to remain a leader in corporate social responsibility and uphold the ‘green’ risk management strategy.
Click here to read the detailed Risk and Balance Sheet Management Report in the 2009 Nedbank Group Annual Report.
Enterprise Governance and Compliance
Enterprise Governance and Compliance (EGC) is responsible for the monitoring of regulatory and reputational risk and the setting of related policies. It also manages the Enterprise Governance and Compliance Frameworks. Nedbank Group’s governance strategy, objectives and structures have been designed to ensure that the group complies with legislation and a myriad of codes, while at the same time moving beyond conformance to governance performance.Nedbank Group has incorporated competitive governance and compliance practices as core strategic imperatives for the integrated sustainable development of our organisation. Our governance and compliance philosophy recognises the importance of ensuring continual adherence to legislative, regulatory and supervisory requirements as a critical part of effective risk management, sound enterprise governance and, ultimately, the holistic, integrated sustainability of the organisation.
Enterprise governance is at the heart of the operations of Nedbank Group and strategically links good governance to effective performance management. EGC constitutes part of the entire accountability framework of the organisation, and requires a balance between accountability and assurance (conformance) and value creation and resource utilisation (performance).
Selby Baqwa serves as a member of the Group Executive Committee (Group Exco) and reports directly to the Chief Executive and also has direct access to the Chairman of the Nedbank Group board.
He is supported by an extensive network of divisional governance and compliance officers, all of whom work closely with the central EGC Division in implementing projects, fulfilling monitoring and training requirements and creating a sustainable governance and compliance culture throughout the group.
Click here to read the detailed Enterprise Governance and Compliance report in the 2009 Nedbank Group Annual Report.
| This page was updated on 31 March, 2010 |  Return to top |
