As digitization continues to transform financial services—with increasing expectations for better, more integrated experiences—BCG helps global and regional institutions build for the future, using digital innovations to drive fundamental change. Banks must transform into bionic organizations that serve customers in ways the financial world has barely begun to envision.
Despite margin pressure, financial institutions are being challenged to do more for customers and clients in every segment. Whether the goal is to meet new expectations by integrating environmental, social, and governance considerations into financial services strategy or to set a new vision for the digital future, BCG helps financial institutions make the transformative moves necessary to meet today’s challenges—and prepare for tomorrow’s.
BCG’s work in the financial services industry—nearly 4,000 engagements over the past five years—has deepened our financial sector know-how and solidified our predictions for what comes next, allowing us to develop advanced sector models, benchmarks, proprietary databases, and tools for meeting strategic challenges across all segments.
Applying our core capabilities in business strategy, value creation, customer journeys, sustainability, M&A, post-merger integration, emerging markets, and innovation strategy, we’ve undertaken both highly targeted and large-scale, end-to-end business transformation in financial institutions. Our big plays in digital include improving personalization, deepening analytics, advancing technology in operations, increasing efficiency, and mitigating risk.
Financial institutions have placed big bets on digital, but many have yet to see healthy returns, for several common reasons: Companies may not tie improvements in the customer experience to back-end operations. They may automate all manual back-office functions rather than eliminate unnecessary ones altogether. Technology upgrades may not line up with overall business goals. Companies may spread spending across too many disparate upgrades, yielding marginal returns.
BCG’s front-to-back digitization approach addresses these and other challenges head-on. It provides a proven path to successful digitization in financial services, helping clients’ efforts pay off faster.
It’s a five-step process:
BCG’s experts in digitization in financial services use proprietary diagnostics, a well-proven playbook, benchmarks, and client input to uncover opportunities to improve digitization. Consultants combine deep industry knowledge with relevant capabilities in customer journey, digital and data platforms, operations, people and organization, and risk management.
Value accrues through:
BCG clients around the world have used the front-to-back digitization approach to create transformations with substantial, lasting impacts:
Reduction in operating costs at a leading Indian bank that BCG worked with to digitize processes; among the improvements was a 90% reduction in cycle times across multiple value streams, which led to greater efficiencies and scalability
Minimum expected revenue increase at a leading Asia-Pacific bank after BCG helped it transform multiple value streams, fueling strong improvements in customer experience and delivery
Faster delivery of key consumer products at a major European bank after BCG helped it transform its customer journey and adopt new ways of working to focus on customers, colleagues, and costs; improved spending efficiencies led to a 50% drop in cost per sale
Direct revenue increase at a US regional bank that collaborated with BCG on a customer journey transformation spanning multiple offerings, including mortgages and commercial credit cards
Contact us at F2BDigitization@bcg.com for more information on how we can help you make the most of your financial institution’s digitization efforts.
Operating-Model Transformation
For a global bank with more than 300,000 staff, we defined a new target business model based on customer economics, then redesigned the bank’s operating model, including channels, products, services, and organization structure. The transformation put the bank’s cost-to-income ratio on track to fall from 54% to 48%, and its cost baseline to fall by 10%, with $1 billion in savings delivered after one year.
End-to-End Digital Bank
For an incumbent bank struggling to compete for new customers, we accelerated the transformation of its digital capabilities and helped build a state-of-the-art digital bank informed by our market research. This project leveraged InQbate by BCG to design a compelling user experience, orchestrate operational processes, and engineer a full technology stack in only ten weeks.
Enhanced Customer Experience
We partnered with a global payment card issuer to overcome technology platform constraints that were hindering its competitiveness. In a radical system transformation over five years, we created a new architecture, fully leveraging big data and advanced analytics to offer a cutting-edge customer experience. The transformation delivered recurring top-line impact, with up to $500 million of additional risk-adjusted revenue in year one.
Elevated Business Standards
When a global investment bank needed to respond to allegations of securities fraud, BCG supported an eight-month, board-sponsored review of business standards, including deep discovery on all business practices across all geographies. Our work produced 39 public recommendations, including new disclosure and origination standards, product documentation, and reporting lines; an updated code of conduct; improved governance; and stronger performance evaluation and training.
BCG supported 11 different banks to form the Sustainable Markets Initiative’s Financial Services Taskforce, creating a forward-looking report & guide that aims to help banks move from their net zero commitments to full implementation.
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