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T RANSFORM Y OUR B ANK S O PERATIONS M ODEL - A Best Practices Discussion Leading Research: Daniel OKeefe, Ashish Jain Booz & Co.

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Presentation on theme: "T RANSFORM Y OUR B ANK S O PERATIONS M ODEL - A Best Practices Discussion Leading Research: Daniel OKeefe, Ashish Jain Booz & Co."— Presentation transcript:

1 T RANSFORM Y OUR B ANK S O PERATIONS M ODEL - A Best Practices Discussion Leading Research: Daniel OKeefe, Ashish Jain Booz & Co.

2 E XECUTIVE SUMMARY : - No single method can transform any of a banks operations model. - Adopted approach depends on banks goal. - Definitely, every banks approach will differ then.

3 S UGGESTED FIVE ( 5 ) BEST PRACTICES FOR TRANSFORMING O PERATIONAL MODEL OF BANKS. 1. Customer – back process transformation. 2. Product and service simplification. 3. Aggressive digitization. 4. Governance and Performance Management transparency. 5. Delivery model optimization.

4 N OTES BY LEAD RESEARCHERS : The 5 suggested Best Practices, combined with aligning the Operational performance goals to business priorities will: a. Enhance operations capabilities, and a. Meet transformation objectives.

5 M OREOVER, YOUR DECISION ON WHAT PRIMARY BANKING BUSINESS OBJECTIVE YOU WANT WILL DETERMINE WHAT APPROACH YOU WILL USE. Examples of business objectives and/or purposes: 1. Drive efficiency and reduce/ increase volume. 2. Simplify and standardize operations. 3. Improve customer experiences and customer relations. So question, what exactly do you want to do?

6 R ESEARCHES SHOW THAT THE 5 B EST P RACTICES ARE COMMON ACROSS ALL INITIATIVES THAT LED TO SUCCESSFUL TRANSFORMATION OF OPERATIONS : 1. Customer – back Process Transformation. Actions : 1.1. Redesign end-to-end process based on desired client experience Analyze trade – offs between level of customization and the value perceived by the client Use a structured, consistent methodology to drive change.

7 2. P RODUCT AND S ERVICE S IMPLIFICATION : Actions : 2.1. Minimize customization where the client sees no value Align cost-versus-complexity trade – offs with the strategic direction of the bank/ business Standardize processes and supporting platforms to drive digitization of client experience.

8 3. A GGRESSIVE D IGITIZATION. Actions : 3.1. Use digital media to create better front-end client inter – actions. (paperless statements, tablet interfaces, etc.) 3.2. Implement straight – through processing to avoid manual processing Form partnership with positioned and non- traditional service providers to build and deploy digital capabilities.

9 4. G OVERNANCE AND P ERFORMANCE M ANAGEMENT T RANSPARENCY / IES. Actions : 4.1. Establish and reinforce clear accountabi- lities, decision rights, and stakeholder roles Define goals and incentives that are clearly aligned with strategic objectives Adhere to a metrics – driven culture with key performance indicators (KPI), unit cost management, etc.

10 5. D ELIVERY M ODEL O PTIMIZATION. Actions : 5.1. Move to shared – services or utility models to maximize scale and reduce costs within banks Integrate and align process – centric IT operational capabilities Increase integration of 3 rd – party providers into the delivery model to add variation to cost and to build capabilities.

11 B ANKS WITH SUCCESSFUL OPERATIONS TRANSFORMATION BY ADOPTING B EST P RACTICES ACHIEVE FOUR BENEFITS. Enhanced Client Experience. Eliminate client complaints. Improved responsiveness to customers / clients. Streamline process. Operational and Cost Efficiency. Reduced cost by driving out variability. Create capacity and scale. Provide cost - effective services. Continuous improvements. Defined standard processes. Train organization in process – oriented thinking. Instill a culture of continuous improvement. Risk Mitigation. Ensure consistent and auditable controls. Align operating model to changing regulations.


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