Is your financial institution getting the most out of its strategic plan?

Discover how the future of banking will rely on Strategy Execution...

Change is constant for the financial services and banking industries. Recent shifts in technology, regulation, competitive landscapes and global events mean that institutions need to quickly adapt to survive and sustain. Yet the most significant barrier is the inability of many financial service firms to nimbly change and course correct.

i-nexus looks at three important issues facing the financial services industry and shares thoughts on how to safeguard and take control of your strategy, with insights on how Strategy Execution is the key to success.

Strategy Execution is change management in disguise

In financial services, the only constant is change and institutions are adapting to constantly evolving forces. To make the most of this transformation, institutions must be willing to embrace Strategy Execution excellence. 

After years of regulatory reforms defined by the global financial crisis and misconduct issues, the regulatory environment is changing profoundly. Deloitte have published their 2020 banking regulatory trends and it is clear that the new focus of tailoring by bank regulators, the strong focus on governance frameworks, the shift to nonfinancial risk, new paradigms for risk and compliance (the three lines of defense), cyber security and privacy changes and other new and developing trends represent significant changes to operating models.

Financial services firms need to be prepared to respond to new trends and course correction is key.

The use of technology to disrupt financial services, and in the process introduce new competitive players in the market, has caused financial institutions to adapt to emerging technologies such as the Internet of Things (IoT), blockchain, artificial intelligence (AI), machine learning, big data, advanced analytics, digitalization and cloud computing. These technologies have proven to be the most important disruptive forces in existence.

The Finance and Banking industries have long been in a state of improving processes – utilizing new technologies in a bid to deliver more efficient services. However, more recently, the speed and frequency with which new technologies and forces continue to emerge has left the industry struggling to keep up.

So, whether you're a traditional financial services firm, a banking institute, a fintech company, or an insurance group, it's time to revisit your plans—because what has led to success until now may not work as well in the future.

Defining course correction and cascading new strategic priorities for large organizations with complex operations, can be difficult – especially when a company is using a certain methodology or approach that people are not very familiar with at first.

Though somewhat complicated to implement, the principles of sound strategy execution represent a fundamental framework for any business that wants to operate effectively and sustainably.

Ultimately, the goal of a strategic plan is to change the way you’re currently doing things and manage that change - the issue is, however, that 70% of strategic plans fail. Tools like i-nexus have been specifically designed and utilized by large financial and banking institutions to safeguard the successful delivery of their strategic plans.

"The need to determine strategies to adapt to the accelerating pace of change is critical.

The changes are coming so rapidly that leaders are both careful not to make imprudent bets but also endeavoring to move quickly enough to ensure they don’t get left behind."

Ernst & Young Global Limited

Cost containment

Leaders in banking and financial services face a considerable challenge. As institutions struggle to improve their return on capital, it is now more important than ever to urgently reduce costs and improve efficiency. Yet, the challenge in consistently cutting costs across complex operational structures can hamper the ability to grow revenues and consistently deliver value.

"Traditional" cost-cutting will only deliver so much, so institutions are now moving beyond traditional cost reduction activities to improve profitability in the long term. Operational excellence and productivity initiatives in financial services and banking are helping institutions to boost long term sustainability.

According to PwC, the most profitable financial services firms are improving productivity b7 15% to 20% by tracking hours/minutes per tasks and rethinking change functions. However, only 15% of firms say they are satisfied with their ability to execute change. Without a fully featured platform, complex institutions can struggle to coordinate and track organization-wide cost containment initiatives whilst balancing the day to day.

Sustainable productivity improvement and cost containment is imperative for the financial services sector. The transformation requires technology and humans to harmonize, one in which digital platforms eliminate non-value-adding routine heavy lifting tasks and also assist leaders in better executing their roles and creating new opportunities. 

“A number of external factors have put significant pressure on the financial services industry in recent years, leaving many organisations with increased pressure on cost structures. Traditional cost reduction measures can only deliver limited results. Financial services organisations need to tackle the productivity challenge heads on in order to move to a sustainable and low-cost business model.”

PwC

Risk management

Financial Services firms rise, fall, win or lose by their ability to effectively manage risks. Banks are in the business of taking risk, and if it is managed well, opportunities to grow are huge. Disaster awaits those firms that do it badly . What's more, poor risk management can impact the entire global economy if a large player fails spectacularly. 

Financial services firms need an approach to risk management that builds effective risk management into every aspect of the business. To truly understand the threats and opportunities faced by the business, firms must bring risk management to life and make every member of staff accountable. Redesigning the processes that firms follow in making major risk based decisions to eliminate bias, analyse risk and improve rigor is a must in 2020 and beyond.

In fact, risk functions that focus on such rigor and de-biasing could even become a center of excellence that rolls out de-biasing tools and process and tools to other parts of the organization. Such an approach works best with enterprise level software to manage, coordinate and track decisions and other investment initiatives to ensure resources, dependencies, schedules and risks are managed.

Another emerging theme that will have a significant influence is the opportunities and risk of artificial intelligence in the financial services industry. The AI enabled boardroom is on the horizon and will equip leaders with real-time performance management, analytics, benchmarking and benefit tracking to gauge results and adapt as required and focus on risk areas.

Artificial intelligence will help firms to be faster on their feet, see risk coming, contain it early and course correct quickly. It will help leaders to get an even better handle across teams and disciplines throughout complex structures to get an overall view of risk and put these in the context of the broader corporate strategy.

Summary

Every challenge needs a strategy, and every strategy needs safeguarding. To remain relevant in the new banking and financial landscape, institutions must reshape their strategies, operating models and invest in digitlization to safeguard Strategy Execution and effectively manage change.

Download your copy of They Key to Strategy Execution eBook to learn more about how you can safeguard the delivery of transformation goals. The eBook explores what makes Strategy Execution so difficult, the consequences of getting it wrong and how you can close the gap to effectively and visibly manage corporate change.

How i-nexus can help

i-nexus is the leading provider of strategy execution software, helping global organizations to turn their strategy into operational reality. Global leaders turn to i-nexus to translate strategy into goals and goals into action while continuously measuring and refining both their performance in execution and also business outcomes as goals are met. This real-time feedback loop enables adjustments to strategy as market conditions shift, opportunities arise or priorities change.

Our customers achieve their strategic goals faster, with greater agility and responsiveness, and with less effort and lower operational cost.

Contact Us

Keri Roberts
Financial Services & Banking Industry Leader, US
keri.roberts@i-nexus.com
+1-646-373-6644

Thomas Hagerman
Financial Services & Banking Industry Leader, UK & Europe
thomas.hagerman@i-nexus.com
+44-7508-976 353