Financial Institutions 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. Our Services for Financial Institutions Asset Management Regulatory Compliance Risk Management Wealth Management Payments and Transaction Banking Retail Banking Sustainable Finance and Investing Wholesale Banking 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. How BCG Helps Create a New Digital Future for the Financial Industry 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. Front-to-Back Digitization in Financial Services 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. BCG’s Approach to Front-to-Back Digitization It’s a five-step process: Define. Setting internal and external targets clarifies a transformation’s vision and the plans needed to execute it. Thousands of potential business cases are collapsed into a finite set of well-defined end-to-end value streams. Design. Creating a future-proof, simplified product and experience that covers both front- and back-end processes yields true innovation rather than incremental change. Digitize. Modernized digital and data platforms address challenges posed by legacy technology and embed analytics and automation into processes. Deliver. Upskilling and continuous cross-functional teaming help break down siloed work, which improves workforce performance and productivity. Direct. New ways of working establish a direct link between collaboration and monetization of benefits. 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. How Our Front-to-Back Digitization Approach Delivers Value Value accrues through: Customer Excellence. A simpler, faster, frictionless customer journey boosts conversion rates, engagement, and loyalty. Colleagues’ Experience. New ways of working and empowered teams speed decision making and provide opportunities for upskilling to increase employee engagement. Cost Optimization. Making processes significantly more efficient reduces implementation costs, and it enables rapid updates, improves the “first time right” rate, and increases reusability and consistency. Control Uplift. System-driven monitoring places controls further upstream, which makes risks more visible, improves compliance, and reduces cycle times. BCG clients around the world have used the front-to-back digitization approach to create transformations with substantial, lasting impacts: 15% 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 10% 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 80% 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 5% 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. CONTACT US Meet Our Financial Services Consulting Leaders Kilian Berz Managing Director & Senior Partner; Global Leader, Financial Institutions Toronto Steve Thogmartin Managing Director & Senior Partner New York Vassilis Antoniades Managing Director & Senior Partner Athens Jean-Werner de T’Serclaes Managing Director & Senior Partner Paris Saurabh Tripathi Managing Director & Senior Partner Mumbai - Nariman Point Andy Maguire Managing Director & Senior Partner London SEE MORE OF OUR FINANCIAL SERVICES CONSULTANTS AROUND THE GLOBE Our Client Work in the Financial Industry 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. Learn More About Financial Institutions Practitioner’s Guide to Operationalising Net Zero for Banks 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. The Sun Is Setting on Traditional Banking The pandemic has accelerated the inevitable; the AI revolution is overtaking banking as we knew it. Banks that don’t transform stand to lose market share to nimbler tech players. Global Retail Banking 2021: The Front-to-Back Digital Retail Bank Leading banks are already organizing solution delivery according to customer value streams and taking customer engagement to the next level. ESG Commitments Are Here to Stay For now, corporate sustainability spending may be curtailed. But investors believe that in the long run, ESG will remain a powerful driver of portfolio performance. How to Reduce the Wealth Gap Between Black and White Americans Financial institutions can help close the race-based wealth gap, including greater access to credit and capital. It appears your browser does not support JavaScript or you have it disabled. BCG.com will work better for you if you enable JavaScript or switch to a JavaScript supported browser. 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