The financial services organisation of the future

Financial services organisations have had to change significantly in the last decade, impacted by regulatory change such as retail bank ring-fencing and increased capital provision requirements; a drive to online customer behaviour away from traditional branches; cost savings; and a loss of talent to other sectors.

Five themes that will shape the future

The current change drivers of Net Zero Carbon, exit from the EU, and a troubled economy will only serve to accelerate this level of change and drive even more of an impact over the coming years.

So, what are the key themes that will shape the financial services organisation of the future in responding to this current context?

Customer expectations will continue to increase

The drive of personalisation and convenience from the retail sector will continue to increase the pressure for similar levels of service in financial services. Customised, easy to understand products with 24/7 access from any device will be in demand. Open banking regulations will continue to push customers to view their products across multiple institutions, with easy comparisons and useful aggregation. Increased competition in the marketplace will leverage this demand. Established organisations will need to maximise the amount of change they deliver using an agile approach to ensure they can satisfy existing customers while continuing to attract new ones.

The power of customer data MUST be exploited

Organisations, especially the more traditional, have huge amounts of customer and product data to drive insight and value. The more innovative organisations will collaborate with others to drive further insight to gain a competitive edge. Change initiatives will need to have a consistent focus on driving fresh insights from existing data, as well as supporting the re-shaping towards more leading-edge data science and analytics capability. Phased, organisational change will also be required to drive the transformation from lower skilled customer service to high skilled customer analytics.

Security is critical to maintaining trust

In a world of easier account transfer, customer trust will be key to ensure customer retention. Any data breaches will continue to hit the headlines, causing massive reputational damage that is hard to recover from. Regulatory fines and clampdowns will become more and more punitive. The organisation of the future will need to continue to invest in the right technology and skillsets to ensure cyber security agendas are met. Placing security front and centre of any change programme, through appropriate representation on governance forums and project teams, will be key.

Operating models will continue to evolve

Cost pressures and automation will drive more consolidation in back-office operation. This is already leading to utility companies being formed from collaborative ventures between institutions to provide single solutions and services to common functions, for example in payments. This will increase along with the move to online transactions freeing-up physical branch space requirements. Joint change programmes with shared governance and control and agreed collaborative ways of working will be needed to drive this transformation activity at pace.

New competition may emerge at scale

The competitive landscape will continue to shift and present challenges not only on a local and regional basis such as with challenger banks – but on a truly global basis. What if Amazon or Google get into banking? Organisations will need to ensure they have access to the best transformation capability to shape, mobilise and deliver critical programmes to respond to such systemic challenges if they arise. Whatever the financial services organisation of the future looks like, with the on-going pressures of cost, product innovation and customer expectations, there is one certainty; it will be transformational and will need real dedicated focus to shape, mobilise and execute the change that will be required.

Do you need change expertise?

At Project One, we have supported many financial services customers over our 23 years in driving transformational change and we received special recognition in this sector in the 2021 Financial Times Leading Management Consultants report. This means we not only understand the context and themes, but we know how to make change happen in this sector.

To discuss further, please contact David Knappett  

Mobile: 07973 152494  | email: [email protected]