In terms of the overall trend of historical development, influenced by the rapid development of information technology and globalization, the differences in products brought about by different regions have been reduced, and the products that banks can provide have gradually become standardized and homogeneous, and the needs of customers. However, it has gradually become more complex and diverse. Meeting the dynamic needs of customers and rapidly changing markets have become key elements of bank success. Therefore, in recent decades, almost all multinational banks’ organizational structures have undergone a change from regional and product-based to customer-based.

2. Overview of the Organizational Structure Reform of ABN AMRO

With 3583 branches in 70 countries around the world, ABN AMRO Bank, currently the eighth largest bank in the world, has also made major changes to its organizational structure. In terms of customer and market organizational structure, ABN AMRO has transformed into a customer-centric strategic business unit (SBU) organizational structure and management model; in terms of the organizational structure of internal business processes, ABN AMRO adopts a company-centric mid-to-backline model; in terms of the organizational structure of business departments, ABN AMRO has subdivided business departments and clarified their respective responsibilities; in terms of supporting the organizational structure of security departments, ABN AMRO has implemented a system of internal stationing extensively.

3. Changes in the Organizational Structure of ABN AMRO’s Customers and Markets

Since January 1, 2001, ABN AMRO has transformed its customer and market organizational structure into a customer-centric strategic business unit (SBU) organizational structure and management model, replacing the regional market-centric matrix organizational structure and management model.

The SBU organizational structure is a business combination that includes two aspects of product series and region. It has both product orientation and market orientation. It is a structure with stronger adaptability and resilience. It is mainly suitable for bank with a high degree of globalization. ABN AMRO’s business in various parts of the world has been quite mature and independent, and has formed a multi-home country market. The establishment of overseas institutions is mainly to purchase local banks to form subsidiaries and financial holding companies. It is a multinational bank that meets the high degree of globalization. The transformation was for the SBU organizational structure, and it succeeded.

The new SBU strategy of ABN AMRO is to provide corporate and investment banking services to companies, financial institutions and public sector customers. Its core customers are mainly large European multinational institutions and large local institutions with multinational operations. This new organizational structure combines customers, products and regions, the customer group forms the highest-level strategic business unit (SBU), and then the product and geographical sub-SBUs are formed under it according to the characteristics of the customer group, thereby forming a three-dimensional structure.

The following are the functions of the 3D SBU:

(1) Customer SBU

Regarding customers as the highest-level business unit, with the same SBU centrally docking a certain category of customer groups, ABN AMRO can directly face customers, combining product standardization and mass production with customer service customization, thus Meet the diverse needs of customers accurately and quickly through a single channel.

(2) Product sub-SBU

Focus on the products most relevant to customers, establish product business experts, and strengthen the in-depth development of products.

(3) Regional sub-SBU

As a backup for the bank to develop its business locally, it combines with the customer SBU and product sub-SBU to implement the development in a specific area.

Achieved effect:

The organizational structure of ABN AMRO SBU puts customers at the center through high-tech means and multiple distribution channels, and provides customers with all-weather services, so that they can respond more quickly and effectively to the market, and achieve their goals through customization and personalization.

Such an organizational structure is conducive to ABN AMRO to develop products in both depth and breadth, combining the diverse needs of customers with professional product services; and avoiding its ignorance of specific regions and understanding each customer more accurately Based on the performance of the products and formulate business development plans; this also helped it maintain its market position in the three parent markets (Netherlands, the United States, and Brazil), and at the same time develop the parent markets in more promising regions.

4. Internal Business Process

 On the basis of ABN AMRO’s customer-centric strategic business unit (SBU) organizational structure and management model, its internal business processes have also adopted the company-centered mid-to-back line model accordingly, that is, the internal business processes (front-end-mid-line- Back line) is divided into two parts.

The first part includes the front desk of all SBUs, and the second part takes the corporate center as a unit to control the middle and back lines, and the middle and back line mode of this corporate center is a natural extension of the front desk SBU business.

The middle line is mainly responsible for asset and liability management, asset portfolio management, financial management, risk control, business decision-making, research and development, etc.; while the back line is mainly responsible for collecting and analyzing customer data, providing technical services, organizing company external exchanges, and managing human resources. The company center composed of both the middle line and the back line can better support and supervise the front-end SBU, and promote the smooth development of ABN AMRO’s internal business processes.

This internal business process gives the SBU greater autonomy, enabling ABN AMRO to have a highly centralized system based on customer-led decentralized business decision-making and dynamic market development at the front desk. The back line enables the bank to achieve standardization of policies and regulations, provides a basis for the board of directors and SBU decision-making parties, and maintains the coordinated development of the SBU.

5. Business Sector

In the process of changes in its organizational structure, ABN AMRO has divided the bank’s business departments into three categories: region, customer and product, and made the rights and responsibilities of the newly created 10 departments clear.

(1) According to area:

ABN AMRO has five business divisions divided by region, namely the Asian division, the European division, the Latin American division, the Dutch division and the North American division. Each business unit is responsible for providing localized banking products to customers in this region.

(2) According to customers:

ABN AMRO has two business divisions divided by customers, namely the Multinational Customer Business Department and the Private Customer Business Department. The two departments provide corresponding services according to different types of customers. For example, the Private Client Division provides private banking services for wealthy individuals and families. By the end of 2004, ABN AMRO managed a total of 115 billion euros in private assets.

(3) According to the product:

ABN AMRO has three business divisions divided by product, namely the Global Market Division, the Transaction Settlement Division and the Asset Management Division. The Global Markets Division is mainly responsible for financial derivatives and foreign exchange transactions; the Transaction Settlement Division is mainly responsible for providing settlement products to customers and providing clearing services to the industry; the Asset Management Division is mainly responsible for providing product portfolios for retail customers and private customers, including funds, etc.

Since business divisions are divided according to three major categories, the business of different business divisions will inevitably overlap. Therefore, when ABN AMRO assesses the performance of each department, any value created after providing services to a customer belongs to this customer. The regional divisions also belong to the divisions that provide this product.

The overall operation process of the ABN AMRO business department is as follows: At the beginning of the year, the bank issued tasks to each business department in accordance with the comprehensive budget management method, and each business department relayed the task to every employee in the department, and the performance of the employees determines their performance and income

6. Support and Guarantee Department

ABN AMRO has 10 main support and guarantee departments, namely audit, organization and coordination, regulations, finance, planning, human resources, risk management, European affairs and market foundation, investor relations and logistics services. According to business needs, the support security department dispatches staff to the business department, and the dispatched staff is responsible for the dispatching department and works with the business department where they belong. In particular, the auditing, risk management, finance and other departments have assigned personnel to provide “personal” support to the business department where they are located. So as to supervise and support the implementation of its strategy and ensure the realization of the bank’s overall strategic goals.

As a major international multinational bank, ABN AMRO has carried out organizational structure model reforms in various aspects such as customers and markets, internal business processes, business departments, and support and security departments. Although the final result still needs time to be verified, the law has brought us great enlightenment and is an effective organizational structure model.

By Demi Zhang