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CBM
CERTIFIED BRANCH MANAGER
PROSPECTUS 2019
BRANCH MANAGEMENT
CERTIFICATION PROGRAMME
This programme focuses on the requisite skills and
expertise for effective bank branch management.

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MODULES
1. Retail Banking Overview 5. Products 9. Effective Sales Management

2. Business Ethics and Compliance 6. Operations 10. Relationship Management

3. People Management 7. Customer Service Quality 11. Financial Management

4. Performance Management 8. Marketing

LEARNING OUTCOMES
• Analyse the key elements of a sound and rigorous KnowYour Customer • Analyse the role of minimal Key Performance Indicators (KPIs) as well
policy as well as Anti-Money Laundering (AML) and Counter-Terrorist as Funds Transfer Pricing (FTP) in effective performance management
Financing (CTF) policies that includes Customer Due Diligence (CDD),
• Effectively, examine the role of the five key dimensions of customer
Enhanced Due Diligence (EDD) and Politically Exposed Persons (PEPs)
service quality and their link to customer loyalty and customer success
• Examine and identify the key roles of bank employees and their
• Measure customer service quality through the application of measures
associated ethical and professional stance in relation to creating
such as Net Promoter Score (NPS), Customer Effort Score (CES) and
positive customer experience
Customer Life-Time value (CLV)
• Identify the key attributes of products and services in both conventional
• Identify the unique approach for effective relationship marketing and
and Islamic banking and their respective roles in meeting customers’
sales of banking products and services as well as the key role of (long-
needs across life-cycle stages
term) relationship management underlined by CRM
• Understand the predominant role of data, processes and systems
• Identify the sources of principal banking risks including unique Islamic
in creating omni-channel customers as well as the fundamental
banking risks
principles of effective queue management in bank branches and call
centres • Apply the CAMELS model and associated ratios to bank financial
statements to identify and interpret key information content

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RETAIL BANKING OVERVIEW
This module covers an extensive overview of retail banking, from viewing banks as financial
intermediaries to considering the roles that a retail bank serves in the real economy.

We also consider the typical sources of funding (i.e., the liability side of the balance sheet) that include
retail deposits and wholesale funding. Later, we consider the asset side of the balance sheet that includes
products and the risks embedded in the banking book and trading book. Next, we present an analysis of
the income statement showing that net interest margin is the main source of income for a retail bank.

We also show, as is typical for any people business, that staff costs dominate operating costs. Finally,
the module concludes with the calculation of common retail banking metrics such as net interest margin
(NIM), net interest spread (NIS), return on equity (ROE) and cost income ratio (CIR).

After completing this module you will be able to:

• Explain how retail banks function to deliver
financial intermediation, support asset
transformation and create money supply.
• Describe the sources of risk that a retail bank
manages in delivering these functions for
customers and the wider economy.
• Describe the core services of a retail bank
and explain the value of these services to
customers.
• Explain liabilities on a retail bank’s balance
sheet and their associated risks, including
core deposits, interbank funding, certificates
of deposit, repurchase agreements and
unsecured debt.
• Explain assets on a retail bank’s balance sheet
and their associated risks, including cash
and cash equivalents, loan products in the
trading book and banking book, mortgages,
investments in bonds and mortgage-backed
securities, goodwill and fixed assets.
• Calculate and interpret retail banking ratios
from information in the balance sheet and
income statement, including the cost income
ratio, the loan to deposit ratio, the net interest
margin and spread, the return on equity and
assets, and the leverage ratio.

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BUSINESS ETHICS AND COMPLIANCE
This module deals with business ethics and compliance. Specifically, it considers the moral principles
underlying business ethics where motives matter most when the bank adopts a customer-centric
strategy. It also establishes a link between business ethics and customer trust, which is a determinant
of customer loyalty.

The module also deals with the separation of ownership (shareholders) and control (managers) and the
resulting information asymmetry which provides an opportunity for managers to pursue self-interest
objectives. This creates agency costs for shareholders. Unlike non-financial firms, there is a complex
web of agency relationships in retail banks which requires an ethical bank culture that provides a moral
compass for all employees.

Finally, sources of compliance risk that include data security, money laundering and terrorist financing
are identified, while the crucial role of the compliance department is highlighted in relation to its
obligation to identify sources of compliance risk; take actions to mitigate these risks; and provide timely
reporting on compliance lapses to senior management and the bank board.

After completing this module you will be able to:

• Give definitions on morality and ethics, and
distinguish between ethical models based on
motives, behaviors and consequences.
• Identify an appropriate ethical model for
customer-centric retail banking.
• Apply this model to recommend appropriate
courses of action in retail banking when faced
with choosing between ‘right and wrong’ and
between ‘right and right’.
• Explain how business ethics encourage trust,
and so improve financial performance.
• Analyse the principal–agent relationships
between different external stakeholders
in retail banks and the managers, and
explain the role of organisational culture in
preventing misuse of these relationships.
• Define compliance and explain the role of the
compliance function in retail banks, including
mitigating risks of laundering money and
financing terrorism.
• Describe the impact on customers of ethical
breaches in retail banking, and recommend
what could be appropriate remedial actions.

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PEOPLE MANAGEMENT
This module emphasises that People Management is based on the Resource-Based View (RBV) of the
firm. It also considers the effects of moral hazard that manifests from the principal-agent problem arising
from the separation of control and ownership. We consider how to design compensation and reward
systems to achieve fair and just rewards for effort at the individual level to reduce the costs arising from
agency relationships.

We show that effective people management can have a positive effect on the bank’s income statement.
Employee engagement increases employee productivity and employee productivity increases economic
profit and hence shareholder value creation.

After completing this module you will be able to:

• Outline the Harvard model of HR
management
• Compare the relevance to retail banks of
the Harvard model and the Resource-based
View (RBV) approach to people management
which proposes that employee skills and
expertise are the bank’s predominant source
of competitive advantage.
• Analyse how a retail bank’s HR Department
can affect the bank’s profitability through
actions that promote employee engagement,
knowledge management, and relational
capital
• Identify the three main drivers of employee
engagement and analyse how different HR
policies will enhance or detract from these
drivers
• Analyse content-based and process-based
theories of motivation, and evaluate the
design of compensation and reward systems
in relation to motivating, retaining and
engaging employees.

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PERFORMANCE MANAGEMENT
This module considers performance management and measurement in retail banks with special
emphasis on the following topics:

• the relationship between performance management and long-term value creation

• various approaches for measuring performance and examples of key performance indicators
(KPI’s) in retail banking

• goal setting and the key element of performance appraisals and the linkages to overall business
and strategy plans

• methods for managing divisional performance where the key role of transfer pricing is emphasised
and explained.

We demonstrate that transfer pricing has a direct bearing on the performance of divisions and business
units where performance measurement must be guided by a limited number of KPIs that are based on
results and behaviours. The Balanced Scorecard summarises the four key areas of emphasis when it
comes to organisational performance.

Finally, we present a branch dashboard for a retail bank that serves to monitor performance as well as
key considerations when managing performance in digital banking.

After completing this module you will be able to:

• Explain the fundamental role of performance
management in linking a bank’s strategy with its
strategic objectives.
• Calculate and evaluate Return on Equity (ROE),
economic profit and Risk-Adjusted Return on
Capital (RAROC) as measures of long-term value
creation in a bank.
• Identify different issues involved in evaluating
a team’s performance as compared with an
individual’s performance in isolation.
• Determine how to keep Key Performance
Indicators (KPIs) to a minimum and related to both
results and behaviour, and identify hidden traps in
people performance.
• Calculate and interpret profit margin, which is
determined by the Funds Transfer Pricing (FTP)
rate, customer rate, operating cost and expected
credit loss, and evaluate the effect of FTP on
RAROC.
• Create balanced scorecards and dashboards that
can be used to evaluate branch performance.

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PRODUCTS
In this module we review the reasons why customers demand services and products, linking the product/
service to the usage. New forms of payment emanating from the development of the smartphone are
also identified. We introduce the family life cycle and note the types of products demanded at each
stage, making the point that this is a moving feast in the modern world.

We consider how savings and loan products may be priced relative to a benchmark rate. We then
move on to discuss the traditional product development and approval process before considering the
significant ‘disruption’ being evidenced through the emergence of FinTech and the resultant trends in
product development, highlighting that innovation and pace of delivery are now all-consuming and
critical when bringing banking products to market.

Finally, we consider product development in the digital age, noting four areas of innovation, and
conclude by identifying eight levels of payments innovation vying for a share of the customer wallet.

After completing this module you will be able to:

• Describe how FinTech startups are
unbundling the traditional retail banking
value proposition, and suggest strategies by
which retail banks might respond.
• Describe the 4Ps process of digital product
development in a retail bank, including
‘pretotyping’, and explain its rationale
• Describe the ‘15 Percent Rule’ to determine
the optimal rollout timing for innovative
banking products, and explain its rationale
• Evaluate the potential advantages and
disadvantages of creating Banking Innovation
Labs by reference to global best practices.
• Explain how ‘intrapreneurship’ can help to
retain creative, entrepreneurial talent within a
traditional retail bank.
• Categorise digital product innovation sub-
areas within banking into four overarching
groups: emerging payments, personalised
products and interfaces, better loans, and
easier access.
• Analyse the threat to retail banks of falling
behind FinTech startups, Tech Giants and
Mobile Network operators in terms of
innovation, by reference to cutting-edge
payments innovations and their technologic
backgrounds.

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OPERATIONS
We begin this module by focusing on the activities carried out in the front, middle and back office. These are viewed holistically, as the activities carried out in each
function form part of the complete operation from both a risk and customer service perspective. We present a practical example of how the activities of each office
work collectively in the deposit gathering process. We then identify the importance of optimising bank processes in terms of process efficiency through introducing
the findings in operations management that possess empirical regularity. These are most useful for management when seeking to reduce operational costs (OPEX)
and improve the cost income ratio (CIR) as well as improving the customer experience. Next we define operations using three essential properties: predictability,
transparency and measurability. We then consider the concept of lean principles in the reduction of complexity in banking process through process simplification.
This module then examines and proposes solutions to process bottlenecks through value-stream mapping, and concludes by revisiting the importance of viewing
banking processes from an end-to-end perspective, being constrained by the weakest link. We then turn to the application of queuing theory solutions. This part of
operations is of sensory importance to customers, and execution is vital both in terms of satisfaction and advocacy (in both branch and call centres).

Finally, we introduce the three-stage model of project management, noting that modern retail banking is highly technologically dependent. Efficient and effective IT
project management is an enabler in optimising bank branch, call centre and digital operations.

After completing this module you will be able to:

• Describe the challenges faced by retail banks in making use of existing • The theory of waiting time, including the peak-end rule, end-of-wait
customer data, and suggest strategies to address these challenges. experience, and the appointment syndrome

• Characterise the operations of a retail bank’s front, middle and back offices • Flexible and timely resource planning, applied to the management of
in terms of operations, processes and functions. branches and call centres.

• Describe how retail banking processes can be optimised by applying • Outline how to manage change by applying the 3D model of IT project
lessons from: management, including:

• Queuing theory, including Little’s Law, the law of non-value-added • Planning change by reference to the iron triangle of budget, schedule
activity and its relationship to complexity, and the Pareto principle and scope

• Lean Six Sigma approaches to process efficiency, including the • Monitoring progress by simple Earned Value Analysis, utilising the
importance of talent management Earned Value Method.

• The theory of constraints and its application in resolving bottlenecks. • Describe the operational challenges introduced by digital disruption across
a retail bank’s front, middle and back offices.
• Describe how the customer experience can be optimised by applying
lessons from:

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CUSTOMER SERVICE QUALITY
This module begins with a brief historical account of customer service quality in retail industries such
as hospitality, aviation and retail banking. We then consider the antecedents of customer service quality,
such as core dimension (reliability) and four others – tangibles, assurance, empathy and responsiveness.
We cite several academic and professional references that have supported the choice of these five
drivers of customer service quality. We then consider the important link between customer service
quality and customer satisfaction.

Finally, from the perspective of a successful cross-selling strategy, we consider the link between customer
satisfaction and customer loyalty. We present several research studies that support the proposition that
customer satisfaction leads to customer loyalty. We consider how retail banking executives should
resolve customer service failures via a Gaps model and discuss the so-called ‘service recovery paradox’.
We conclude that the most important recommendation for retail banking executives is to strive for error-
free and better-than-expected service the first time.

After completing this module you will be able to:

• Describe the historical evolution of customer • Describe how to apply the Gaps model
service quality as a key differentiator, using (or Distances model) to assess defects in
examples such as Amazon.com, Singapore customer service quality and to resolve
Airlines and Umpqua Bank. customer service failures.

• Explain how customer service quality is
driven by the dimensions of reliability,
responsiveness, assurance, tangibles and
empathy (Parasuraman et al.’s R-RATE
model).
• Calculate Net Promoter Scores (NPS)
and Service Quality Metrics (SQM), and
evaluate their usefulness and deficiencies in
measuring customer satisfaction.

• Analyse the links between customer service

quality, customer satisfaction (defined
in terms of customers’ perceptions and
expectations) and customer loyalty.

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MARKETING
In this module we explore a range of topics that will provide you with a good understanding of marketing within the context of retail banking.

First, we take a look at the changing nature of marketing, particularly how things have evolved over the last few years. It is apparent that the financial services sector
is not immune to disruption as the rising Fintech movement gains pace.

We then look at how we define a business vision and mission within an organisation. Within the context of retail banking, the need to communicate a clear vision
and purpose to one’s customers is becoming increasingly important, particularly as customer relationships in many geographies have suffered due to a lack of trust
between the customer and their bank.We go on to explore the marketing mix and see how it has changed over time. The addition of People to the traditional 4P model
is quite important in retail banking – which is truly a people business. It is clear that Price, Product, Place and Promotion can be replicated by a competitor in retail
banking. But people make the difference, since their unique skills of professionalism are not easy to replicate.

We determine the key methods used to understand customers and digital marketing opportunities by evaluating some of the latest tools and techniques in this area.
Finally, we look at data management before considering financial education and inclusion.

After completing this module you will be able to:

• Define the marketing function, and describe how it has been impacted by • The stimulus-response model
recent changes in the market environment, demographics, social behaviour
and technology. • Johnston’s 5 stages of buying

• Compare different models of the marketing mix in terms of their relevance • Analyse the challenges faced by retail banks in making use of existing
to retail banking, including: customer data, and recommend strategies to address these challenges.

• McCarthy’s 4P model • Describe appropriate qualitative and quantitative customer research

techniques, taking advantage where appropriate of new digital channels.
• Lauterborn’s 4C model
• Outline how to apply the marketing process in the context of retail banking,
• A combined 4C+P model including the distinct stages of analysis, strategy, planning, execution and
control, and evaluate the impact of digital innovation on each of these
• Additional factors arising from digital innovation. stages.

• Compare different models of buyer decision making in terms of their • Outline the social and commercial benefits of improving financial inclusion,
relevance to retail banking, including and suggest ways in which financial technology can help to deliver these
benefits.
• Kotler’s typology of buyers’ behaviours

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 EFFECTIVE SALES MANAGEMENT
This module examines the importance of maintaining a disciplined sales process in order to facilitate
effective sales management through the introduction of the Seven Steps Sales Process, the component
parts of which we describe in detail.

Next, we present the Sales Performance Scorecard, adapting Kaplan and Norton’s Balanced Scorecard
for retail bankers and building the links to individual performance and development plans. Successful
implementation should result in improved processes, better educated and more competent staff,
increased sales to customers (based on their needs) and greater customer satisfaction.

We go on to consider the skills crucial to the role of the Retail Banking Sales Manager in delivering
effective sales management, with a particular focus on the practical application.

Finally, we evaluate the significant impact of digital, such as ‘Selling the UX’ and the ‘Network Effect’.

After completing this module you will be able to:

• Characterise an effective sale in the context of
retail banking, and analyse how effective and
less effective sales will impact on the retail
bank’s relationship marketing.
• Describe the Seven Step Sales Process and
explain how it can be applied to increase the
value of sales, both to customers and to the
retail bank.
• Describe how to appraise the effectiveness
of salespeople, using a Balanced Sales
Performance Scorecard and related key
performance indicators (KPIs).
• Describe how to apply the GROW (Goal,
Reality, Options and Will) model in coaching
salespeople.
• Outline the responsibilities associated with
the role of Sales Manager in a retail bank,
and describe how these responsibilities can
be addressed, including the use of individual
performance plans for salespeople who are
underperforming.
• Identify risks to clients and staff of retail
banks, and to the banks themselves, that can
arise from prioritisation of unrealistic sales
targets, drawing on analysis of the Wells
Fargo Fake Accounts Scandal.
• Suggest specific sales strategies for digitally
innovative services, drawing on the theory of
information cascades and recent initiatives to
overcome resistance to onboarding.

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RELATIONSHIP MANAGEMENT
This module integrates several issues raised in the previous nine modules of Retail Banking I. Relationship Management is based on the creation of an optimal long-
term bank–customer relationship that serves the long-term needs of the customer and, as a result, the long-term profitability of the bank.

In order to develop a model that will identify the drivers of a long-term customer–bank relationship, we define Customer Relationship Management (CRM) and its link
to customer intimacy, positing the question about what customers may want from a relationship with their retail bank. We go on to examine Customer Relationship
Management (CRM) through the lens of the bank staff whose role it is to deliver operational CRM. We then consider the role of the banking consultant and specialist
advisor before identifying the equivalent roles for bank staff operating in the SME environment.

However, innovative channels raise an array of open questions in relation to CRM and relationship management in general. This module also considers the emerging
Customer Managed Relationship (CMR), where the customer owns their personal information and the bank’s offerings are designed with the customer’s needs
having priority.

Trends in Customer Relationship Management (CRM) also consider the wide array of forward-looking incremental improvements in CRM. Current trends are making
CRM systems more intelligent: providing a single client view, visional excellence, predictional-behavioural insights, third party and social media integration, voice
enabled functions and more. We take a look at ten defining trends of innovation within CRM.

After completing this module you will be able to:

• Define relationship management as it applies in the context of retail • Analyse the changing roles of channels in delivering effective customer
banking. relationship management (CRM) and their implications for organisational
structures, including:
• Explain the theory of relationship exchange as the basis for relationship
management in retail banking, distinguishing between episodic and • Forward-looking trends affecting such systems
relational value.
• Predictional-behavioural CRM systems
• Explain Habryn’s two-dimensional model of customer intimacy, highlighting
the importance of bank adaptability and the quality of the customer • Differentiated value propositions from different major CRM vendors.
relationship as the basis of trust in customer–bank relationships.
• Describe the transition from customer relationship management (CRM)
• Describe the components of customer relationship management (CRM) as a to customer-managed relationships (CMR), analyse the challenges this
process, and analyse the expectations of relationship customers. presents for retail banks, and suggest how these challenges might be
addressed.
• Identify the roles of bank staff responsible for creating high-quality
customer relationships in both the personal and Small and Medium-sized
Enterprise (SME) sectors, and analyse the personal attributes required of
these staff.

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 FINANCIAL MANAGEMENT
The scope of this module covers five areas: key principles of bank financial statements; structure of
bank financial statements; analysis of bank financial statements using the CAMELS framework (Capital,
Asset Quality, Management, Earnings and Profitability, Liquidity and Market Sensitivities); drivers of
bank profitability; and the importance and relevance of bank capital.

While some financial analysis was conducted at a higher level in Retail Banking Overview, a more
detailed financial statement analysis is conducted in this module with the familiar CAMELS approach
as a guideline. This leads to a discussion of maturity (gap) analysis, capital adequacy, liquidity ratios,
profitability ratios and soundness of balance sheets with reference to nonperforming loans and
impairment charges.

The module concludes with a case study requiring a complete financial statement analysis.

After completing this module you will be able to:

• Explain the meaning and significance of the
main entries in generic income statements,
balance sheets, loan books and maturity
analyses for retail banks
• Conduct risk analyses of generic balance
sheets for retail banks by calculating the
banks’ cumulative maturity positions.
• Explain the meaning and significance of the
six CAMELS dimensions (Capital adequacy,
Asset quality, Management soundness,
Earnings and profitability, Liquidity and
Sensitivity to market risk)
• Compute, from information supplied,
and interpret bank accounting ratios that
demonstrate the CAMELS model, including
Tier 1 capital adequacy ratio, leverage ratio,
Risk-weighted Asset (RWA), Asset quality via
the Loan Book, Loan loss provisions, Return
on Assets (ROA), Return on Equity (ROE),
Cost to Income Ratio (CIR), Liquidity ratios,
and Cost of funds.
• Identify extraneous drivers of ROE.

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“Get your team’s level of knowledge,
skills and ethics certified.”
Stephane Dubois
Former Head of HR
Société Générale

REGISTRATION FEES
Fee per Candidate per level
1-19 candidates US $999
20-100 candidates US $849
101-1,000 candidates US $799
1,001+ candidates US $699

The fee per Candidate includes access to the RBA Learning Centre,
a hard copy of the coursebook and one computer-based examination. Each
re-sit fee is $300.
For more information on the blended learning fees (which includes a classroom learning
component), please email us contact@rba.international

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