ANNUAL REPORT 2016

MANAGEMENT DISCUSSION AND ANALYSIS

7.0. DEPLOYED RESOURCES

7.1. INFORMATION TECHNOLOGY AND OPERATIONS

In 2016, the Group moved forward in its transformation journey, not only by continuing previously launched initiatives, but also by introducing new ones. Key focus areas of the transformation program consist in improving the customer experience, enabling the operations with better capabilities, and increasing operational efficiency.

At the customer experience level, in parallel to the expansion of its brick-and-mortar network, Bank Audi Lebanon introduced tools to support the branches in better serving customers. These tools include:
  • State-of-the-art Mobile Banking Application – A s p art o f i ts Omni-channel initiative, and building on Odea Bank’s successful experience, Bank Audi Lebanon launched a new mobile banking application, with a revamped user interface and an enriched set of services. The design and implementation of the other components of the Omni-channel platform and an integrated contact center are currently in progress.
  • Debit card instant issuing in branches – This tool enabled the Bank to deliver debit cards to customers immediately upon applying for their cards, providing them with instant access to their accounts and transacting capabilities.
  • Novot – Launched for the first time in the region, Novot, known as Pepper worldwide, is a humanoid robot with artificial intelligence introduced to the branches to gain traction through gamification. Novot toured more than 40 locations, welcoming customers and promoting new products and services, while entertaining customers.

Enabling the organisation with better capabilities remained at the forefront of priorities in 2016. New solutions were introduced:
  • A new CRM platform – The implementation of an advanced CRM platform integrated with the Omni-channel solution was launched in Lebanon in 2016. Designed for customer insight management and analysis, the platform aims to strengthen customer-centric relationships and promote dedicated servicing.
  • Treasury and Capital Market solution – Bank Audi Egypt completed, in 2016, the implementation of a Capital Markets solution, while Odea Bank introduced enhancements to its Treasury Trading solution, enhancing operational efficiency of those activities.
  • Integrated finance and risk management – Building on the successful rollout of the IFRM systems at Bank Audi Lebanon, the year 2016 witnessed the launch of a similar project at Odea Bank, while Bank Audi Egypt completed the implementation of its IFRM framework. In Lebanon, the implementation of the Risk Management and Profitability modules is still underway.

At the level of operational efficiency, the Group worked on modernising the Core Banking Systems in both Bank Audi Lebanon and Bank Audi Egypt, with the execution currently underway in 2017. Efforts were also engaged to automate processes whereby additional workflows were being migrated to the Document Management System at Bank Audi Lebanon, and the Bank delivered this solution for use at Bank Audi Egypt. In parallel, work on the Business Process Management tool is currently underway at Bank Audi Lebanon, while the initiative was launched in Egypt.

On the other hand, in order to enable and support the transformation, Bank Audi’s IT is achieving additional milestones across several entities, in its strategic journey towards: a scalable service-oriented architecture and towards IT as a service model, whereby different infrastructure components are provisioned, operated and managed through software and automation, and delivered as a service. This allows the Bank to provide fast, reliable, and secure services, while controlling costs.

7.2. HUMAN RESOURCES DEVELOPMENT

If the year 2016 were to be labeled, it would easily hold up to the title “Human Resources Upgrade” in the Group’s main entities, Bank Audi Lebanon, Odea Bank in Turkey, and Bank Audi sae (Egypt).

BANK AUDI LEBANON

Distinguished and rich accomplishments were witnessed during the year within the Human Resources Department.

Following three years of engaged efforts and dedication, the e-Business Suite Human Resources Management System (HRMS) – a state-of-the-art, versatile yet user-friendly software – was successfully launched on 18 January 2016, driving transformation and change at the level of the Bank. As employee data gathered on HRMS directly affect a number of systems under the umbrella of e-Business Suite (notably Oracle financials), this implementation enabled Human Resources to have an even greater leverage as a strategic business partner of the various business lines across the Bank. In order to guarantee a smooth transition from previous systems to HRMS, the Organisational Development (OD) team remains fully devoted to continuously support all bank employees on properly using the available modules through direct on-the-spot assistance, trainings and user manuals. This comes over and above the support provided through the interactive Self-service module and its numerous functionalities offering a wide range of online services and requests allowing to cut the end-to-end processing in almost half, thus increasing employee satisfaction and encouraging employees to further use the system. Among other processes, the annual Performance Management (PM) process was migrated to HRMS in 2016, thereby allowing employees and managers to fill, submit and keep track of annual appraisals on the HRMS Self-service portals.

In parallel, and honouring its role as the Human Capital advocate, HR at Bank Audi Lebanon introduced, in the last quarter of 2016, a concept entitled “Design Thinking: Molding Employee Experience” and offering a variety of compelling and meaningful employee solutions that leverage technology and analytics.

Employee experience was also promoted throughout the relocation of the employees’ parking premises to a new one, featuring a lounge area, a coffee machine and vending machines, with two new additional services offered at special corporate rates (car wash and laundry) aimed at facilitating employees’ access to basic domestic services in a one-stop-shop.

At the level of Recruitment and Selection (R&S), the team kept its proactive pace within the Bank’s fast changing and dynamic environment by continuously attracting potential talents which totaled 275 resources for positions in different branches and departments within required deadlines.

Within a parallel scope, 530 internal lateral and vertical moves of existing employees underscored the Bank’s belief in their career potential.

As part of its civic role, the Bank offered internships to 510 university students with over 98,000 on-the-job-training hours. Bank Audi participated in job fairs within the most reputable local and international universities. It also took part, once again, in the ”Har vard Arab Weekend” hosted by Harvard Business School in November 2016, and participated in their organised career fair. In addition, the Bank hosted the customary luncheon reception for Lebanese students enrolled in Ivy League institutions for the 6th consecutive year, aiming at building ties with them.

Supporting the Bank’s strategy in developing the SME Banking (see section on SME Banking on Page 52), the Relationship Management team partnered with related stakeholders for the revamping of this business line. Accordingly, R&S put in great efforts to find adequate resources for a diversified range of related positions. Within that scope, new and existing employees were offered 1,392 training hours in 2016, focusing on the fundamental and practical areas of the SME activity.

Transparency being one of the Bank’s core values, “Afternoon Encounter with the General Manager” sessions were held throughout 2016. They aimed at creating open forum discussions which offer junior-level employees the opportunity to engage in open dialogs and voice their concerns to the Bank’s Management in small groups, thus strengthening the ties between the Bank’s leadership and its working human capital.

Moreover, following the successful implementation of the Succession Planning (SP) project in 2015, the Board of Directors officially adopted the SP during 2016. The SP is a continuous process that is expected to be reviewed annually and followed by a ”Talent Management” process.

In 2016, the Training and Development (T&D) efforts remained predominantly focused on the personal and professional development of employees in compliance with the beliefs and culture prevailing in Bank Audi Lebanon. To that end, over 111,606 training hours and 192,000 on-the-job training hours were delivered, targeting the advancement of the human capital technical and behavioural skills. It is to be noted that T&D continued to ensure compliance with the Central Bank of Lebanon’s certification requirements by enrolling employees in specific certifications related to regulatory banking functions.

The training activity hours were mainly centered on both academic courses, as well as managerial and behavioural trainings. The chart below sets out the breakdown of training activity in 2016 by topic:

TRAINING IN 2016

TRAINING IN 2016

The Training Academy recorded the participation of 3,272 employees, spread out over 210 sessions covering specialised technical/behavioural courses. Meanwhile, the Risk Training Program under Risk Academy allowed close to 200 head office employees to attend sessions on various topics, thus widening their knowledge and understanding of risk-related issues. In addition, to ensure proper exposure of Managers and subject matter experts to international best practices and trends, 114 employees attended overseas trainings on 70 various soft/technical topics related to their area of expertise.

Building on the successful launch of the Advanced Management Program (AMP) in 2015, 20 self-motivated mid-career managers were chosen to be part of 2016 AMP cohort 2. The 30-day executive program delivered over 12 months focused on providing participants with tools to effectively lead and manage people, embrace and drive change initiatives, create and deliver customer value, gain the confidence to make the decisions needed to succeed and get exposure to different functional areas.

In addition, the Branch Management Program (BMP) continued for the 2nd successful year. During 2016, 16 qualified employees were selected to join the BMP to eventually assume Branch Manager and Assistant Branch Manager positions, after exposure to an intensive learning environment for a period ranging between one and three years.

Furthermore, Bank Audi continued encouraging employees – 27 during 2016 – to pursue higher education in local top-tiered and international universities such as the American University of Beirut, INSEAD in France, Instituto de Empresa in Spain, and London Business School. In addition, the Bank sponsored 26 employees to obtain professional certifications related to their lines of work.

ODEA BANK

In 2016, Odea Bank’s HR practices continued to be shaped around Management’s strong belief that human capital is the Bank’s most valuable asset for success. Within that scope, Odea Bank’s HR continued to actively act as a strategic business partner by assuming a critical role in the correlation between efforts aiming at increasing performance, efficiency and cooperation, contributing to the creation of synergies between business units, while boosting the overall motivation and performance levels.

Odea Bank’s HR conducted one-to-one meetings with employees covering 75% of the Bank’s talent pool. Head office employees were also invited to a “Lunch with Executive Committee Members” in the last quarter of the year, in a move to promote and enhance an internal open communication platform, and to offer employees an opportunity to meet and share ideas/ suggestions with top executives in small groups.

It is Management’s belief that one of the most important factors behind its success lies in the effective organisational structure which is strongly supported by a fair, objective and efficient reward system. During 2016, salary review and bonus studies were carried out, taking into consideration average wages in the banking sector, job complexity and job content across all positions, as well as performance indicators, all well adjusted within the annual budget.

Recognising the importance of incorporating and leveraging technology within HR practices, Odea Bank’s HR has been integrating HR processes into its HR system, providing effective solutions that best meet employee needs. Within this context, the “Web-based Recruitment Module” was launched in December 2016 as an additional module to the existing ones, which allows the end-to-end management of the entire hiring process and enables candidates to apply to vacant positions and create CVs through the Bank’s website.

Training and developing employees’ soft and technical knowledge is well aligned with the Bank’s strategies and corporate culture. In 2016, the overall training hours reached close to 40,000, corresponding on average to 3 working days of trainings per employee. In order to facilitate the learning process, employees are offered full access to several applications and platforms, notably, “e-Odea HR Training Platform”, “Vide’O”, “Skillport,” and “Odea Bank Exclusive”. Furthermore, in November 2016, “Odea Bank in-house Mentoring Program” was initiated to develop competencies of selected mentees and help them align their personal career goals with the organisational goals. Odea Bank’s in-house mentoring program also supports mentees’ motivation and engagement, and provides them with an opportunity to expand their business and personal capabilities, in addition to growing further in the organisation.

BANK AUDI sae (EGYPT)

In 2016, the HR department of Bank Audi sae (Egypt) continued to work on providing equal opportunities, rewarding talent and building a strong teamwork culture. It remained true to its role as communicator, facilitator, consultant, as well as change catalyst, while thriving to achieve Management’s overall strategy and goals.

Believing that employees are the Bank’s main key asset, HR concentrated its efforts on activities that increase staff productivity, engagement and motivation.

During 2 016, B ank A udi E gypt’s H R t eam p rovided a n e fficient a nd comprehensive support service to all stakeholders, emphasising the delivery of high-level soft and technical knowledge to employees: 69,000 training hours and 4,000 on-the-job training hours were delivered through various channels such as the educational academy, training programs and developmental projects.

Additionally, HR established its own in-house assessment center which aims to attract/recruit high caliber employees while promoting and developing existing ones through a set of psychometric/non-psychometric exercises.

Bank Audi Egypt’s HR has also started designing its Succession Planning project whereby high potential employees are identified based on a set of specific criteria, thus eliminating any future risk of vacant critical positions.