Planning for a connected digital future
According to Anaplan’s research, despite three quarters of the banks Considering digital transformation as a major challenge during this period, many institutions have succeeded in overhauling their customer experience, making it simpler and more transparent than ever.
“Banks will only be able to harness the exciting potential of connected planning if they break down silos and bring data together across the organization.”
But now, with the transformation of the customer experience, banks have the opportunity to leverage data to improve operations, planning and strategy internally.
Accenture research revealed as 78 percent of banks use data extensively, few use key enablers like analytics (7%) and artificial intelligence (5%) to extract the full value from that data.
However, banks able to leverage AI and analytics over the next few years will be able to plan for uncertainties, have a clearer picture of all departments, and even better monitor things like as environmental, social and governance (ESG) commitments.
This is only possible if banks are able to truly break down silos and connect data from legacy systems to one place. At Anaplan, we would say Connected Scheduling is the solution to this problem and will usher in a new era of transformation for the banking industry.
As a broad concept, Connected Planning – sometimes known as Integrated Business Planning (IBP) – means a more coordinated approach to planning designed to achieve better alignment between the strategic, financial and operational levels within a company. ‘an organization.
This means connecting all planning capabilities across the enterprise, for example linking strategic plans with sales, operations and finance. It should balance resources and funding with the company’s financial goals.
Of course, with the number of stakeholders involved and the multitude of moving parts, it can be difficult to implement this style of planning.
Break down the silos
Banks will only be able to harness the potential of connected planning if they break down silos and bring data together across the organization. This not only includes functions such as marketing, human resources and sales, but also divisions such as corporate, personal, retail or small business banking.
In many cases, banks struggle with multiple on-premises legacy systems and outdated tools that cause problems when it comes to pulling data from across the bank. In fact, a study by S&P Global found 33 percent of financial institutions still rely primarily on legacy infrastructure and 58% use legacy infrastructure for “some” functions.
This opens the door to version control issues and leaves little room for planning error. As we move into a more connected world, it is essential that banks move from siled planning models to connected planning models.
Navigate the uncertainties
Scenario planning and forecasting in banking are essential tools for success. Connected scheduling may seem simple, but it’s surprising how many banks still rely on outdated scheduling models.
More than two thirds of bank executives find maintaining agility to respond to economic volatility a significant challenge. Moreover, when relying on tools such as spreadsheets, it is nearly impossible to provide accurate forecasts or change strategies in real time when these challenges arise.
Using AI-powered connected planning can provide banking executives with the information and insights they need to meet the challenges ahead. This new way of planning allows banks to leverage data to answer critical long-term questions about the business, such as how will rising inflation impact my finances in the next quarter? Or what would be the impact of a new government?
Adopting AI and machine learning will allow banks to quickly answer these questions and serve their retail customers more efficiently.
Plan for the future
Connected planning also enables banks to deliver on their ESG promises. This is particularly important following the recent United Nations Climate Change Conference which has made minimizing the impact on the environment a top priority for businesses. Many of the world’s largest corporations and financial institutions have voluntarily announced bold new plans to mitigate global warming.
More than 5,200 companies have pledged to achieve net zero carbon targets by 2050. Around 450 banks, insurers and investors – collectively representing $130 trillion in assets and 40% of global private capital – have pledged to make their climate-neutral portfolios over the same period.
While it’s good to set ambitious goals for waste reduction or getting to net zero, banks need to develop realistic plans to achieve those goals or we won’t see any progress. Search by Anaplan found that almost a fifth (18%) of banks found it difficult to link plans to executions and actions. In fact, it was one of the top three challenges.
Connected planning is a simple way to integrate ESG goals with financial return on investment to transform sustainability goals and practices. It empowers banks to make decisions that are good for the environment, good for business, and hold them accountable to their goals.
Even before the pandemic, it was a priority for companies to make the most of the data that exists in their organization. Search by McKinsey found that total budgets for data initiatives have increased by 50% over the last three years, from 2019 to 2021. This figure is only expected to continue to grow in the coming years, so it is essential that banks take planning to the next level.
The future of banking is connected, and banks that can leverage data will ultimately make better decisions.
Andy Thiss is Country Manager and Regional Vice President for Anaplan Australia and New Zealand