Diagnostic Reading of Guaranty Trust Bank Plc - Case Study Example

Introduction

Banks and other financial institutions in the world are currently carrying out their operations within an unprecedented context. In the past thirty or so years, the complexity and scale of the average financial services organizations be it in insurance, capital markets or insurance has increased exponentially. As these organizations confront this new age of data warehousing and big data solutions, the need for having a good data management strategy installed increases every day. The challenge, however, comprises answering the question of what constitutes a good data management strategy or exploring the available options for creating data warehousing strategy or data warehousing strategy. Research indicates that installing a data warehousing framework is best executed after comprehending an organization's data management needs (Ponniah, 2004). These questions will be sufficiently addressed by analyzing Guaranty Trust Bank Ltd, and the organization's entry into one of its recently acquired markets, the challenges of data management frameworks and the notion of the implementation of the Bolman and Deal Frame Model as a mechanism for employing a better data warehousing and data governance policy for the financial institution.

Background of Guaranty Trust Bank (GTB) Ltd

Guaranty Trust Bank Plc. is a financial institution that has corporate and retail banking as its main business focus. GT Bank was formed in the early 1980s and operated as a microfinance institution for about nine years, although it was later incorporated as a limited liability corporation in early 1990s, during which time it additionally received its maiden license to provide mainstream banking services to the Nigerian public. GT Bank started its operations in the year 1991 in February. GT Bank Plc. became an incorporated company in September 1996 and later was awarded merit accolades by the Nigerian Stock Exchange President. The organization later received a universal banking license in the year 2003 (Chiemeke, Evwiekpaefe & Chete, 2006).

In the year 2007, GT Bank became the first Nigerian commonly owned organization as well as the first Bank in sub-Saharan Africa to be listed in the Deutsche Borse as well as the LSE (London Stock Exchange). The initial public offer of the bank was able to raise approximately US$ 749,000,000. The bank's performance in these markets has been aided by their cutting edge technological advancements, particularly in SMS banking and online banking in the Nigerian market. The bank has additionally fused its services with global monetary carriers such as MasterCard and Visa to aid in their operations (Gtbank.com).

The UK financial services authority granted the bank the banking license to practice in the UK in the year 2008. This move widened the organization's customer base significantly, and its successful performance in the UK market prompted the institution to partner with other organizations in venturing into new markets. In 2009, GT Bank partnered with Eko Atlantic City developers to create the 819 ha of land in the Atlantic Ocean, which is near the Victoria Island on the Nigerian Coast.

In lie with the banks expansionary moves, GT Bank acquired a 70% stake in Fina Bank – an East African Bank operating in three countries namely Kenya (Headquarters), Uganda and Rwanda. The 70% acquisition meant that Fina Bank would change the name, and subsequently, all the Fina customers and assets would be transferred and belong to the Nigerian bank. The entry into the East African market – one of the fastest growing markets in the world according to the Economist would pose great data migration challenges for the bank, an aspect that threatened the acquisition process. It is for this reason that the organization has been selected for this analysis, for examining the challenges of data management frameworks and the notion of the implementation of the Bolman and Deal Frame Model as a mechanism for employing a better data warehousing and data governance policy for the Bank.

Diagnostic Reading of Guaranty Trust Bank Plc.

Guaranty Trust Bank Plc. is an organization that has been on the ascendancy for the past few years. The company's exemplary performance is viewed in the way since its inception and introduction into the mainstream market; the company has been expanding its activities into new markets, including Europe and Africa. GT Bank success is attributable to a combination of many factors including good management and formulation of the right strategies. However, the same cannot be said for its most recent acquisition within the East African market.

GT Bank entered the East African market in the year 2012. The bank had long been in consultative talks with all Fina Bank officials concerning the process of selling nearly three-quarters of Fina Bank to GT Bank. The talks would later be finalized towards the end of 2012, with a signed agreement to sell about 70% of the bank to the Nigerian Bank at an estimated $US100, 000,000. The bank was issued a banking license in early 2013 and subsequently started effecting structural changes to the not so big network in the three countries. It is in this process that the bank nearly lost nearly half of its clients through data loss.

Fina Bank Kenya, Fina Bank Uganda and Fina Bank Rwanda were apparently using Equinox banking system as their core banking system. Equinox was an old dated 1990's banking system that did not have many features as required in the now advanced financial market. Fina Bank's slow turnaround time was very slow and was largely blamed on the slow system. An evaluation of the situation by GT Bank prompted the purchase of a more modernized core system called Banks, which the organization was using in some of its subsidiaries and which would gel well with the requirements of the East African market.

GT Bank strategy involved an upgrade of the entire internal infrastructure and a subsequent upgrading of the systems to support the new banking system. Experts were hired to facilitate the exercise. The changeover was hurriedly done with minimal training for the staff serving in all the company's branches. Learning a new system while trying to integrate the new features, products and processes proved too much for the staff members, who were too afraid to make mistakes with the change of guard at the management level. Many staff members opted out, with resource flight from the highly experienced staff averaged 56%. The staff members who opted to remain behind could not manage to handle the data transfer, and the company lost a huge portion of their market share as a result of poor management of data management systems as well as data warehousing frameworks.

A diagnostic reading of GT Bank's entry into the new market would help in identifying the challenges faced by the company in the new market. Looking at GT Bank, there are some factors that may have affected the organization's changeover process. With a (hostile) takeover of the bank, the new entrant ought to have handled the process with care, understanding why Fina has stayed for very long with the system and yet still generating enough profits over the years. The mismanagement of the clients information, which to some extent resulted in some legal challenges for the company led to a reduction in revenue in its first year after the takeover. GT Bank's situation may be observed metaphorically.

Adopting the brain metaphor, it was important for the organization to create a learning environment for the current serving members of the financial institution. It is possible that GT Bank's assessment of the processes and the functions of the current system may have identified holographic features of Fina Bank's systems obliquely developed on the ideologies redundant functionalities. However, it is important to note that the staff members had formed strong teams over the years that were operating efficiently in the old system without any incidents of data loss or any notable significant mismanagement of client's information. They had developed vital capabilities at nearly all levels in a manner that facilitated efficiency, security, and integrity.

Relevant Frames and Possible Solutions

Bolman and Deal (1997) both sought acumens obtained from both practice and research into the four frames or perspectives to try and understand organizations, every organization having its reality and image. The four frames are the symbolic frame, the human resource frame, the structural frame and the political frame (Fruehauf et al., 2015). The following is an analysis of two frames namely, structural and human resource frame that are significant to GT Bank's case.

The structural frame deals with the organizational structural aspects and makes the following few assumptions: That organization's sole purpose for existence is to achieve the set objectives and goals; that challenges occur as a result of poor organizational structure; that it is best when roles are assigned to division of labor, which results into specialization and that things work best when reasonableness succeeds human needs (Sriram & Farley, 2014).

As with GT Bank, there are some activities that fall within the scope of the structural frame. The company's organization about the takeover was poorly managed, without a set clear objective of data and information management. The organization had teams in place for the management of the acquisition; however, these teams overlooked what mattered most within the organization, and the organization ended up losing clients.

The other important frame concerning GT Bank acquisition of the smaller bank relates to the management of the human resource. The human resource frame denotes the people's skills and expertise, commitments, energy and attitudes as important assets that are able of either breaking or making an organization. The human resource frame additionally gets the praise and recognition for spearheading the possibility that companies can be mutually rewarding, productive and energizing. There are few assumptions held with the human resource frame: That organization's sole purpose is to serve individuals and their needs and not the widely held presumptions that humans exist to serve the needs of the organization; that organizations and individuals need each other and that a healthy fit serves both the organization and the individuals.

Concerning GT Bank's acquisition, the organization failed to incorporate the ideals of the human resource frame within its operations, a direct consequence being the resource flight soon after the mismanagement of the takeover exercise. Even though Fina Bank employees had been already recruited before the takeover, the introduction of various changes to the management and the systems of the bank seemed like the hiring process was being redone, and effective management of the staff was required to keep the atmosphere calm. A calamitous mistake of failing to manage the employees resulted in the mismanagement of the clientele and their information, which resulted in huge losses in the financial year 2013/2014.

Interrelationships of Frames

Both the human resource frame and the structural frame are closely knit together, as the human resource frame needs the structural frame to function appropriately. An organization must have its policies and processes laid out before beginning operation, and that includes the human resource management policies. For GT Bank Plc., a weak structural frame, particularly with the management of the takeover, may have led to the resource flight and subsequent data mismanagement claims by some customers. Therefore, an organization needs to have a strong structural framework to assist in the management of the other frame.

Recommendation for Organizational Improvement

The changeover process was finished, and the new system was subsequently installed amid internal instabilities that saw the organization reduce overall revenues in its newly acquired East African subsidiaries. The process was completed; however, the organization needs to implement strong data management systems for purposes of management of the customer's data in the future in instances where the organization would experience transformative changes.

An important aspect involves the implementation of data warehousing processes. It is of paramount importance to spend enough time with individuals in the organization who are managing client's information and to understand the processes behind the process. Spending enough time with these individuals would give significant insight into the organization, the opportunities, the challenges, the environment and the strategies so that even while implementing new strategies, the organization would know what to avoid and what to address. It is important to carry out this research undertaking for an intelligent and smooth changeover process.

Conclusion

In the past thirty or so years, the complexity and scale of the average financial services organizations be it in insurance, capital markets or insurance has increased exponentially. As these organizations confront this new age of data warehousing and big data solutions, the need for having a good data management strategy installed increases every day. The challenge, however, comprises answering the question of what constitutes a good data management strategy or exploring the available options for creating data warehousing strategy or data warehousing strategy. Research indicates that installing a data warehousing framework is best executed after comprehending an organization's data management needs.