• Industry: Financial Services, Banking
  • Type: Business and industry issue, White paper
  • Date: 9/10/2012

A successful approach: Keeping the transformation on track 

The operating model is only part of the challenge. No matter how robust or sophisticated the operating model may be, if the implementation process does not have an effective governance framework, driven by strong, central design authority, the operating model will never fully achieve what it was designed for. The real test is in how effectively the operating model is implemented.

Implementing a new operating model might mean introducing a new technology infrastructure, moving towards new processes, or changing the operational structure of the business – major changes that need to be pushed through the organization effectively, without compromising the objectives of the operating model.

Creating a design authority

To help achieve this, KPMG’s approach is to work with member firms’ clients right from the design stage through to implementation. We do this by co-opting senior members of the operating model design team – from the business, from the technology side, from the TOM design team at KPMG – onto a central design authority. The role of the design authority is to oversee not only the governance framework, but advising on the practical implementation of the operating model.

All changes are reported back to the design authority. It reviews what is being implemented at each stage to verify if it is in line the new operating model – is this implementing what the design specifies, or has it changed? If it has changed, was there a good reason? The main objective of this method is to not be a policing authority but be a guiding light that drives towards ‘zero defect’ during implementation.

5 key lenses for viewing bank transformation

Banks can start their journey on the right path by asking a series of strategic questions viewed through five lenses.

  • Strategic: What will your business model look like in the new world and how does this fit with your strategic goals?
  • Operational: How will you continue to drive operational efficiency whilst meeting regulatory requirements?
  • Regulatory: How do you align your approach with the broader regulatory agenda?
  • Structural: How will you balance the need for structural separation with the commercial need for an integrated and efficient global group?
  • Financial: How do you build a financial model that supports regulatory requirements whilst delivering a compelling equity story?

Figure 1

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