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Financial Services Leaders, Don’t Forget About Operations!

By Michael Horney | August 17, 2022 | 0 Comments

Financial ServicesFinancial Services Operational Excellence and Cost Optimization

The way financial services leaders are working has changed significantly over the past few years. At many financial institutions, business leaders and IT leaders are working closely to implement big strategic and technology initiatives. Many progressive firms are building intelligent automation models to predict customer needs or developing digital ecosystems that offer products and services outside of banking or insurance. But too often, operations leaders are left out of these initiatives altogether.

The financial services industry is also starting to see more COOs and Heads of Operations with technology or strategy backgrounds, from both inside and outside of the industry. This new wave of leadership can accelerate digital and business model transformation and bring a fresh set of eyes to the function. However, these big initiatives have a big impact on day-to-day operations. And if operations leaders aren’t included in the conversations, or if the new wave of COOs brings only a business or technology perspective, the day-to-day impact on operations can be an afterthought, causing significant disruption to real-time customer interactions.

For business unit leaders and new COOs leading large initiatives, let’s look at the day-to-day impact of operations.

Financial Services Operations Management 101

The main goal of operations is to process customer requests as efficiently as possible. Each day, operations managers and employees have many accounts to open, applications to evaluate, securities to purchase, claims to process, or funds to transfer. And each day (for the most part), those jobs get done. 

For the traditional role of an operations line manager, this means three objectives to optimize workflows:

  1. Understand and match fixed demand with capacity supply
  2. Take action to modify demand and/or capacity to meet equilibrium
  3. Institutionalize and adjust workflow management to create stability and efficiency

While none of these objectives are the responsibility of the COO or the business unit leader, it is important that they recognize how strategic objectives can impact demand and workflow capacity.

Big Decisions Have a Big Impact on Operations

Big strategic decisions should always consider the impact on operations. As you introduce more products, implement technology, or expand into new markets, you alter the demand or the capacity. Therefore, the line manager must adjust the workflow to reallocate the necessary resources to quickly respond to customer requests. Operations leaders and managers need visibility into how new strategic initiatives might impact their workflows to forecast capacity accordingly. 

Now, take a second to think about all the different changes you’ve led over the last few years. Don’t get me wrong! Most of those changes were warranted. But that’s a lot of adjusting and readjusting for operations managers and employees. 

Due to those changes, increasingly, line managers are also encouraged to be career coaches, technology liaisons, change communicators, as well as traditional task and workflow managers. This includes identifying automation opportunities, communicating the personalized impact of initiatives, and coaching employees on the critical competencies for the future of operations. 

But when I talk with operations leaders and managers, many of them say something like: 

“My teams don’t have the capacity to think about transformation. We have our hands full just running the bank.”

Tap into the Knowledge of an Operations Expert

With the way the industry is moving, you no longer need 30 years of experience in bank operations to be the COO of a financial institution. You don’t need to be an expert in operations to lead a business unit or strategic initiative at a bank or insurance firm. But you should get to know operations experts to better inform your decisions moving forward.

So shadow a workflow. Talk to a line manager. Or invite an operations leader to your next meeting, if you haven’t already. Get an understanding of their job, so you can do your job better. All in all, just don’t forget about operations!

Here are a couple more resources to get inside the mind of an operations leader and manager, and you can always schedule an inquiry with an expert to learn more.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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