Know the ultimate business goal

It can be difficult to take a top-down, cross-functional view of operations transformation, given the scope and complexity of the ever-changing banking and regulatory environments. And banks’ fixed cost structures and their significant investment in legacy systems further complicate the picture.

As such, banks tend toward an incremental approach to improving operations. With limited funds to invest in operations, they simply plug the biggest hole first and those holes are often defined by regulatory and compliance priorities rather than enhancing competitiveness. Coordinated operations transformation that happens at the enterprise level is the exception.

But banks that use scale and intelligent operations can take a much more holistic approach. Not only can they improve customer experiences and outcomes in the process; they can also transform the cost curve.

Advancing the operating model through technology is about more than the technology itself. Progress happens when business and technology come together to develop new joint governance models, integrate ecosystem partners and co-create the strategic roadmap so that technology investments align with the business strategy. In many leading banks, the Chief Technology Officer and Head of Operations now report into a single executive who has a complete view of how technology can enable an effective operations transformation.

Banks need to scale business-technology collaboration but have some ground to cover. Increasing collaboration will help banks be more innovative and make better use of expert talent and technology.