What Are Your Bank’s Priorities?

Resource Allocation

A bank has limited resources and must proactively allocate according to their priorities. Unfortunately, while banks often know their objectives for the year, they often don’t take the time in their strategic planning sessions to place those objectives in a prioritized context and don’t add a weighting to each. As such, there is often a misallocation of resources and a misalignment over the precedence of initiatives. In this article, we look at top initiatives for CEOs, the priority of each initiative and their relative weights.

 

Growth Above All Else

 

In April, Gartner asked 460 CEOs to rank their top three strategic initiatives for the rest of 2018 and through 2019. No surprise that asset and earnings growth ranked at the top of the list. This category was down from last year, but only because “Corporate Development” was up sharply (which came the second most important priority). Interestingly, Corporate Development includes items like M&A, partnership (including fintech), business model refinements, launching new business lines and restructurings. We do acknowledge that many of these initiatives could be categorized as driving growth so the year-over-year trend could be misleading as definitions change.

 

Below is a graphical representation of each CEOs top priorities with the number one priority in the top left and the lowest priority on the bottom right. The sum of the percent weightings adds up to 100%. Red means that the category is down in priority from last year, green means it is up, and grey means it is unchanged. The percentage in each box is the allocation of time and resources to the effort. 

 

Bank CEO Strategic Initiatives

 

Some of the categories that are getting the most focus compared to last year include culture and training; customer-facing marketing (within customer engagement and also growth); and risk management (within the Management category). Also of note, while the starting place is low, more CEOs are looking how their processes can be improved to help increase scale and aid in productivity.

 

Putting This Into Action

 

Every day, bank management needs to think about where they spend their time and resources. While your priorities might be different, we thought the above data was interesting as it helped us reflect on where we spend our time. Further, we are not here to represent that above categories are where you should be spending your time as we provided some quantitative analysis on that topic HERE.

 

Bankers can use this data to compare to where they spend their time. The comparison drives the question - where should I be spending the bank’s resources to best help accomplish the bank’s goals. In addition, bank managers should be providing leadership to help all staff understand not only the initiatives of the bank but the relative importance of each initiative. Doing so will help the organization better align the use of their resources with their initiatives and should result in a more effective bank.