Skip to main content Skip to Footer

LATEST THINKING


Professionalizing change in banking

The unprecedented scale of change in banking demands a professional change capability and greater bank-wide agility.

Overview

Banks today are facing an unprecedented level of change in terms of complexity and scale. These changes can primarily be attributed to three factors—large-scale transformational change in banks; shortening of strategic cycles leading to the pressure of delivering tangible business benefits within a short span of time; and limited funding that requires banks to do more with less.

This report provides an overview of the regulatory and competitive changes in the current banking landscape, and examines how banks can incorporate these changes with minimum downtime and maximum efficiency.

Background

The banking industry has always been dynamic – constantly facing changes in the regulatory and competitive landscape. Over the years, many banks have successfully delivered small projects and adopted technology changes. However, the industry's track record with transformational change, which is required now, has been decidedly mixed.

Boards and regulators are now taking an active interest in investment portfolios and the oversight of systemic risks. The banking industry's current landscape is dominated by regulatory changes, with most banks directing 60–80 percent of their change spend on compliance. These changes are mandatory, deadline-driven and externally supervised. Some, such as conduct and standards, require changes in IT systems, processes, culture and behaviors.

In addition, banks are facing increased competition from both challenger banks and new entrants attacking lucrative parts of the value chain. In response, many traditional banks have embarked on strategic cost reduction, simplification and re-engineering.

But to retain and grow revenues, banks need to transform the customer experience with new propositions and digital channels. Digital resets the "clock speed" for change, requiring faster and more agile capabilities.

Analysis

The following three factors have led many banks to start investing in professionalizing change and building bank-wide agility:

  1. There is more transformational change than ever before, which is inherently multidisciplinary and complex. Therefore, it demands new ways of managing change. New operating models that result from transformation are highly disruptive and complex to implement.

  2. As strategic cycles have shortened, time frames for transformation have compressed dramatically. These large-scale complex programs are no longer allowed to run for years without delivering tangible business benefits. There is also a shift to more agile delivery.

  3. The available funding for change is constrained and dominated by mandatory programs. Hence, banks need to do more with less, delivering modifications at a lower cost and with greater success rates.

Recommendations

To ensure a smooth transformation, Accenture recommends banks:

  • Prioritize their change capabilities: Define clear priorities for the next 3–5 years, and plan the capacity and capability to address them.

  • Build professional change capabilities: Focus on the practical application of new capabilities, methods and tools through pilot programs.

  • Develop bank-wide change leadership: Prepare the entire organization for a fast pace—creating agility and change leadership at all levels of the business.

  • Harness bank-wide agility: Promote and encourage participation, trust in management and a healthy team environment.

  • Collaborate with delivery partners: Use change teams for effective collaboration with delivery partners such as compliance, HR, communications, facilities, procurement, finance and IT.

  • Industrialize change capability: Institutionalize and industrialize to reap benefits such as faster, lower-risk and lower-cost delivery.

  • Source change capability: Explore the various sourcing options—from project-based sourcing to strategic partnerships and managed services arrangements.