Growth, transformation, resiliency, and efficiency are shaping how financial services organizations better serve their customers in a rapidly changing world. Growth is the ultimate goal, but this is no longer just about expanding markets and product offerings – it is about becoming an integral part of a customer’s life and making it easier and safer to manage their finances.
In line with this, we are seeing the industry evolving from being product-led to people-led, ensuring services remain relevant for today’s consumer.
In order to develop and maintain this role of a trusted financial ‘partner’ for consumers, financial institutions must prioritize resiliency in an increasingly volatile world. This goes beyond regulatory considerations and should focus on operational, financial and reputational resilience, alongside the ability to manage complex ecosystems which are more connected than ever.
So, how do financial institutions manage transformation whilst driving growth and resilience without delay? As you would expect, there is no simple answer to an inherently complex question. However, there are some key areas for consideration.
The Efficiency Innovation Challenge
When it comes to change, speed is frequently of the essence. An increasingly complex environment is driving multi-dimensional change and forcing organizations to be fast. However, many meaningful transformations are inherently not swift processes. Couple this with a need to drive growth and stay resilient and it creates an intricate operating environment.
In other words, financial institutions are often faced with an efficiency innovation challenge – with a pressure to reduce costs now whilst also investing for the future. To tackle this, a unified transformation approach must be adopted. Disconnected programs result in a disjointed enterprise architecture and limited business impact, highlighting the importance of an organization-wide culture of change.
Developing crystal clear strategic priorities and objectives will help streamline this and ensure that programs run in the most connected and fluid way possible to achieve complementary results across the organization.
Risk is a key consideration when developing such strategic priorities, where risk management must be baked into their foundation to ensure a flexible approach to growth and change. Pairing risk with agility is not always a natural fit, with pressure to maintain resilient systems alongside the need to experiment and move fast. Moreover, most transformation is operationally disruptive, particularly within the setting of a highly regulated financial services environment, so managing risk whilst modernizing must be planned for effectively.
A Revenue Roadmap
Whilst most financial institutions will recognize the need for developing and leading with fully integrated strategic priorities, the reality of creating objectives that will really shift the transformation dial is quite challenging. Keeping revenue front of mind is often the solution. Linking transformation programs to revenue outcomes to prioritize and maintain momentum during times of change can ensure an alignment to growth objectives.
Financial institutions need to decide what matters most to their organization and align planned changes to revenue outcomes. Afterall, becoming simply the most efficient and resilient company alone does not create long-term business viability. These areas need to transform alongside, and in conjunction with, growth objectives – both from a revenue and customer success point of view.
Sustainable Transformation
Whilst transformation is required across the industry, the most successful changes will be those which are sustainable and fit for the future. Making the best decisions can be difficult and indeed some changes will be wrong to start with. Therefore, the ability to be agile and flex as the organization, the market and consumers shift is crucial. Change is not simply a one-time process, but an ever-changing evolution. Learning how to correct and re-align transformation programs with micro-shifts is as important as the change itself.
Implementing platform-based modernization with a phased approach can assist with creating a sustainable model for change. Operating in this way can address the often conflicting need to invest in new technology and processes now versus the need for immediate revenue opportunities and cost savings. Half implemented change will not deliver results, and neither will innovation that is not funded or implemented correctly, so a phased and a long-term sustainable plan is more likely to create a model for success.
Creating a Shared Language of Change
Transformation and growth both require one unequivocal factor – an effective culture of change. Change is very often internally focused, and so creating an environment conducive to evolution and an openness to embrace new ways of working can ensure that objectives are not only achieved, but that the changes are optimized both internally and externally.
Creating a shared language of change and a shared understanding of risk can assist with this. Many previous structures within the industry have creating natural business silos, and now is the time for a more connected and integrated approach.
With this in mind, deciding on the type of leadership required for transformation and what skills are needed within the business is key. There is strong demand for new skills associated with digital and transformation right now. Such transferable skills create competition across multiple industries, often making it difficult to attract the right people and compete for talent.
However, filling the talent gap is only one part of the equation. Deciding on the right skill sets for effective delivery both now and for the future takes careful consideration. Deciding how to attract the best leadership and talent is a fundamental building block of transformation, as well as mapping skills from existing employees into new operating models and ways of working.
In summary, we are in notable period of industry evolution where change is non-negotiable for future success. We are seeing unprecedented transformations which are truly shifting gears for the financial services sector. Siloed programs are no longer viable, with interconnected approaches taking the lead to deliver worthy outcomes.
Growth, transformation and resilience are all top of mind and when truly embraced at a strategic level, they can work in harmony to deliver a sustainable roadmap for the future. Transformation programs are not just about an investment of time; they require the right energy and input across the full operational cycle to truly set you apart from the competition.
Originally published in
Global Business and Finance Review
