Strategy Crowe

How Do You Answer the 5 W's to Adjust Banking Strategy?


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Change is inevitable, and organizations that don’t adapt their banking strategy might have trouble finding consistent success. Execution without answering the who, what, where, when, and why of change can lead to more roadblocks, like resource spending without returns and lost buy-in from the board, employees, and customers.

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Answering the who, what, where, when, and why of change can help banks identify what to monitor and how to act on that information. This approach can help create a consistent and objective method to keep banking strategy aligned with goals for sustainable and profitable growth. 

  1. Who?

Clear direction can come from an organizational view 

The larger the bank, the more people, departments, and decisions there are to be managed. Above the technology strategy or the commercial banking strategy, there’s room for enterprise strategy. An enterprise project management office (PMO) can help organizations make more impartial strategic adjustments, informed by a perspective beyond day-to-day operations. 

Sharing progress is better than starting from scratch 

Greater collaboration and multiple perspectives can help translate learnings from one department to wider organizational insights. For example, an enterprise PMO can share lessons learned from adopting a new technology platform or changing an existing product with leaders across many departments. 

However, there’s a distinction between education and overengineering guardrails. Too many checkpoints can stifle the critical thought, risk-taking, or learning necessary to overcome the challenges that come with new ways of doing business. It’s important to avoid turning a guiding hand into a potentially burdensome hurdle. 

  1. What?

Internal metrics can help mark progress 

Stakeholders should agree on metrics well before the execution phase. A bank’s target values can differ depending on specific situations, requirements, and capabilities that underlay external core measurements such as: 

  • Loan-to-asset ratios 
  • Return on equity 
  • Net-interest margin 
  • Customer base and satisfaction 
  • Segment growth 

External influences are important, but they shouldn’t dictate every move 

When so much of a bank’s effort and monitoring is inwardly focused, transformations can seem like they’re happening in a bubble. But banks still have to operate in the wider world, and external forces can influence a strategy’s direction and effectiveness. These external considerations can’t be ignored, but where and how new capabilities position the bank in the market must be fully considered: 

  • Economic changes, such as fluctuating inflation and interest rates 
  • Customer shifts, like changing needs, demands, and preferences 
  • Compliance developments, such as new regulations or examiner focus 

These types of factors are important to consider as the organization unfolds and evolves its banking strategy. However, trying to account for every movement and trend in the market could lead to analysis paralysis. Organizations don’t need to consider every external factor for every decision. It’s best to identify and act on a select group of key influences. 

Qualitative observations can feed quantitative analysis 

Quantitative metrics can help tell an objective story, but it might be hard to know where to start, especially with factors that don’t always have established measurements in place. 

Anecdotal assessments can help start forming that story. Are new accounts slowing down? Are more complaints coming in? Maybe branch and call center employees have a sense of why. You can put systems in place so these messages can travel to the project team or enterprise PMO to help create number-based measurements. 

The green KPIs should influence change as much as the red 

When determining key performance indicators (KPIs), it’s important to remember that it’s not all about spotting warning signs. Keeping an eye on the potential for growth in successful areas is also important. Organizations can confidently lean into these areas throughout execution while remaining true to their banking strategy. 

  1. When?

Setting thresholds can help prevent impulsive decision-making 

Moving resources to capitalize on a sudden opportunity could deliver short-term benefits at the cost of the greater plan. Thresholds that guide when an organization takes action can help bring consistency to changes that are large enough to affect its banking strategy. 

As an example, an organization might set a point at which a slowdown in account openings triggers a strategic refocus on bringing in more customers. Or it could determine a market threshold that would re-emphasize certain lending areas as a priority for investment. 

Problems get solved, and new ones move up the list 

If an organization selects, for example, six KPIs to monitor, at some point it will presumably start checking those items off or deprioritizing them. Once a concerning area has been corrected, thresholds and ongoing trends for other key metrics will point to where to focus next. 

  1. Where?

Metrics can offer important meaning 

As banks set and adjust their strategies, they might find that some initial risk assumptions are upside down. For example, a bank might expect a vendor to bring new risk – only to find that its own technology platform, which the vendor is required to use, needs to be addressed. 

Organizations can dig into their metrics for additional context regarding why key strategy-shaping events occur. When a strategic initiative doesn’t go according to plan or flat-out fails, leadership needs to approach the situation honestly to get at root causes, some of which might include: 

  • Postponing a project because of a new opportunity 
  • Lacking adequate staff for the initiative to succeed 
  • Not having the right technology in place 

Future success will rest on considering all available metrics, trends, and anecdotal evidence so root causes can be identified. This process will help banks rethink their approach and adjust accordingly before future challenges arise. 

  1. Why?

Alignment becomes easier when the groundwork is set 

Strategy adjustments should reflect consistent, objective information. A measured look can allow organizations to pause, get perspective, and avoid hasty decisions. Long-term choices that are based only on short-term gain or that overcommit resources can have an enduring negative affect on the overarching strategy. Organizations can avoid ad hoc decision-making by implementing a more impartial and collaborative approach that begins with agreements from major stakeholders. 

Getting the organization into better position includes: 

  • Using evidence to communicate why certain actions were taken 
  • Verifying whether solutions deliver the KPI results in the initial goals 
  • Knowing where to change based on the metrics 

When an enterprise banking strategy takes years to execute, the more prepared and informed an organization is, the more effectively it will be able to align execution with internal needs and external changes. 

Learn more about our how Crowe financial services specialists can help your organization.