Bank reduces operating costs by 58% with VMO strategy

The financial sector is highly competitive and dynamic, requiring companies to pay attention to operational efficiency and the ability to adapt to different scenarios. Agility and the continuous improvement of processes have become decisive in facing challenges and risks, guaranteeing the sustainability and growth of these businesses. In this context, project management is gaining prominence, with increasingly innovative approaches. This is the case with the Value Management Office (VMO), with an expanded focus on creating, maximizing and measuring value for the organization.

Unlike the traditional Project Management Office (PMO), which is often limited to process efficiency, the VMO intends to ensure that all initiatives are aligned with organizational strategies and effectively contribute to achieving results. The establishment of this structure is associated with efficiency gains, cost reductions and continuous advances in operations.

The impact for businesses in the financial sector can be significant, such as the 58% reduction in operating costs achieved by one of the main automotive financing banks operating in Brazil. The company hired act digital to structure its VMO, integrating the business, IT and compliance areas. The solution aimed not only to resolve these operational and strategic issues, but also to establish a sustainable model of governance and value management.

Based on a structured methodology, which included exploratory interviews, process mapping and framework analysis, as well as phased implementation and the adoption of a continuous improvement cycle, the VMO was developed taking into account the organization's reality. Read on to find out how the project was developed, the challenges faced and the results achieved.

Customer: leader in automotive financing

The financial institution that hired act digital for this project specializes in credit solutions for purchasing vehicles from two renowned global automakers. The group has a history of almost a century, and has been operating in Brazil for 20 years. Today it is the leading bank in the country for financing zero-kilometer vehicles from these two automotive brands.

Due to its close relationship with automakers and dealer networks, the institution plays the role of establishing and implementing market strategies that are competitive and aligned with customer profiles. In order to achieve these objectives and maximize the value generation of its business model, the company needs to continuously improve its processes, especially in terms of operational efficiency, investment optimization and risk management.

Challenge: complexity and operational inefficiency before the VMO

The bank was facing critical challenges related to the lack of a unified operational structure and project management. Operating in a highly regulated market, the company had to adhere to a strict set of industry regulations and international standards, a factor that imposed an additional challenge on the organization, increasing the complexity of the operating environment.

In this context, the bank set itself objectives to resolve the challenges:

• integrate and optimize processes in the business, IT and compliance areas;

• align project initiatives with strategic objectives;

• establish effective governance to support compliance and risk management;

• implement a value management system to maximize return on investment.

Solution: strategic implementation of the VMO

Considering the demands of the organization, the act digital team sought to leverage the bank's operational and strategic efficiency, having the VMO as the central structure. The methodology employed aimed at gaining an in-depth understanding of the processes, identifying gaps and proposing integrated solutions for governance and value management.

Stages in the creation of the VMO

- Exploratory interviews and focus groups: the first phase of the project included exploratory interviews involving the main stakeholders in the business, IT and compliance areas. This was followed by focus group research sessions to understand the insights, challenges and expectations of the different parties involved.

- Process mapping: a mapping of existing processes was produced, allowing to identify the points of integration between the areas and the critical activities for creating value.

- Analysis of the local framework: the project continued with a thorough assessment of the local framework, considering the specific regulatory context of the banking sector and the company's regulations to ensure that the solution complied with legal and corporate requirements.

- Identification of bottlenecks in the processes, methods and portfolio: a detailed analysis allowed identifying the bottlenecks in the processes, methodologies and portfolio, which were key elements in defining areas for improvement.

- Solution design: after the initial stages of analysis, the act digital team proposed the creation of a governance and value management office integrating the business, IT and compliance areas, in line with the demands presented. During this phase, a "to be" vision was also developed, aligned with the strategic objectives and compliant with the guidelines of the company's headquarters (based in France).

- Phase-by-phase implementation: this stage ensured a smooth transition, minimizing operational impacts. Each phase was outlined with specific goals, including integrating processes, implementing technologies and establishing compliance practices.

- PDCA cycle: there was also the establishment of a PDCA (Plan, Do, Check, Act) cycle to continuously monitor the VMO's performance. The adoption of continuous improvement practices adjusted strategies as necessary to meet changes in the internal and external environment.

By adopting this comprehensive methodology, the VMO's consultant ensured effective implementation of the governance and value management office, in line with the financial institution's expectations. The integrated focus on the areas of business, IT and compliance ensured a holistic approach to maximizing the value delivered to the client.

Results: transformation promoted by the VMO

The VMO structuring in the context of the financial institution, was able to deliver the results sought and exceed expectations. With the implementation completed and the processes revised, the company improved its operational efficiency, cut costs, and reduced insecurity in relation to risk and compliance issues. The project's entire approach was aimed at boosting business performance, in line with corporate strategies.

Results achieved with VMO

- Operational efficiency: there was a notable improvement in the operational efficiency, resulting in cost savings of 58%. This indicator reflects the optimization of processes, elimination of redundancies, and improved productivity in critical areas identified during the VMO analysis.

- Increased investment effectiveness: the VMO implementation has optimized investment results, maximizing the rate of return and exceeding initial expectations. This highlights the VMO's ability to direct investments to areas of greater value, guaranteeing a substantial return.

- Continuous improvement with the PDCA cycle: adopting the PDCA cycle proved to be an effective strategy for continuous improvement. Over the implementation period, there was an average 15% increase in operational efficiency with each cycle, demonstrating VMO's adaptability and capacity for continuous learning. This approach relied on the dissemination of good management practices to support and underpin the Value Management Office culture.

- Increased compliance and risk reduction: the VMO was essential for compliance strategies. There was a 30% reduction in incidents of non-compliance, a percentage that proves the effectiveness of the governance practices implemented.

These figures are just a portion of the positive impacts observed with the implementation of the VMO. The integrated approach in the areas of business, IT and compliance represented a comprehensive and measurable transformation in the client's operation, reinforcing the importance of this strategic instrument for sustainable value creation.

How we can help your company

In a scenario accelerated by digital transformation, act digital stands out as a strategic partner with the expertise to create robust solutions that match innovation, agility and technology. We have an in-depth understanding of the challenges and opportunities facing the financial sector to develop projects responsive to the market complexities.

Through agile and effective approaches, we boost our clients' operational performance, ensuring greater efficiency and security in all their transactions and processes. This is complemented by our commitment to enabling financial institutions to expand their presence in digital channels.

The VMO is a structure that revolutionizes processes with a focus on increasing value generation for different business strategies. Would you like to promote this transformation in your company? Contact the experts at act digital.