The Swiss bank is aiming to simplify and improve its business with a new matrix structure, which reinforces cross-divisional collaboration and management oversight.
Credit Suisse’s new business divisions consisting of wealth management, investment bank, Swiss bank and asset management will be overlaid by the four geographical regions of Switzerland, Europe, Middle East and Africa (EMEA), Asia Pacific (APAC) and Americas, according to the bank's statement on Thursday.
This could mean that employees at the bank will gain an extra reporting line: a regional one and one for the business activity, allowing for more collaboration and oversight within the business.
Slimming To Four
There are however cautionary examples of other Swiss businesses who applied the matrix system. In 2019, the electrical engineering group ABB had to undergo a painful reorganization to get rid of its complex matrix organization.
Insurer Zurich's former CEO James Schiro also introduced a matrix structure with mixed results, which its current CEO Mario Greco has been keen to eliminate.
Restructuring Cost
Credit Suisse's restructuring comes with a 400 million Swiss franc ($438 million) price tag. The bank expects these to incur between the fourth quarter of 2021 and next year. While more lateral coordination within the business will shake up established silo-organized hierarchies, it will not replace re-setting the bank’s moral compass and addressing its cultural failings.
The pace at which these structures are set up will also be important for the new model to succeed. The time the bank is taking to find adequate leaders of its new units is not a good omen.
