2. What?
Internal metrics can help mark progress
Stakeholders should agree on metrics well before the execution phase. A bank’s target values can differ depending on specific situations, requirements, and capabilities that underlay external core measurements such as:
- Loan-to-asset ratios
- Return on equity
- Net-interest margin
- Customer base and satisfaction
- Segment growth
External influences are important, but they shouldn’t dictate every move
When so much of a bank’s effort and monitoring is inwardly focused, transformations can seem like they’re happening in a bubble. But banks still have to operate in the wider world, and external forces can influence a strategy’s direction and effectiveness. These external considerations can’t be ignored, but where and how new capabilities position the bank in the market must be fully considered:
- Economic changes, such as fluctuating inflation and interest rates
- Customer shifts, like changing needs, demands, and preferences
- Compliance developments, such as new regulations or examiner focus
These types of factors are important to consider as the organization unfolds and evolves its banking strategy. However, trying to account for every movement and trend in the market could lead to analysis paralysis. Organizations don’t need to consider every external factor for every decision. It’s best to identify and act on a select group of key influences.
Qualitative observations can feed quantitative analysis
Quantitative metrics can help tell an objective story, but it might be hard to know where to start, especially with factors that don’t always have established measurements in place.
Anecdotal assessments can help start forming that story. Are new accounts slowing down? Are more complaints coming in? Maybe branch and call center employees have a sense of why. You can put systems in place so these messages can travel to the project team or enterprise PMO to help create number-based measurements.
The green KPIs should influence change as much as the red
When determining key performance indicators (KPIs), it’s important to remember that it’s not all about spotting warning signs. Keeping an eye on the potential for growth in successful areas is also important. Organizations can confidently lean into these areas throughout execution while remaining true to their banking strategy.