Asian-Pacific banks have made steady progress in closing the operational excellence (OpEx) gap and are determined to overtake their European rivals in the near future. Some industry commentators see this as natural side effect of the higher economic growth within the Asian region.
We don’t believe that the region's growth is the only driver for OpEx improvements. We know that not all Asian banks are improving at the same rate; and that organisations that lack a structured improvement program as well as their senior management team's commitment to follow through will fall behind, quickly.
Possibly more now than ever before, it's critical for leaders within the financial service industry to actively steer their organisations to master OpEx and emerge as “leaders’. Step change improvements are needed to offset increasing rivalry and the ever increasing regulatory burden. This inevitably mandates better process hygiene and efficacy to address the ever-present pressure to achieve acceptable margins whilst remaining compliant. The need to improve on operational excellence is indisputable.
This year’s OpEx Survey recognises a number of key focus areas that can help determine the future success of financial service organisations in this region:
· Strategy Alignment
Innovation management, customer value management, and strategy implementation will be key factors to gain competitive advantage as bank customers become increasingly sophisticated.
· Process, Organisation & IT Management
Firms recognise the importance of building a broader BPM capability rather than focusing on point solutions in process improvement or throwing more money at technology.
· Performance Management
Measuring and reporting performance, and the ability to link it to an appropriate KPI system will be key to manage value drivers, which ties back into our first point on "Strategy Alignment".
· Human Capital Management
Leading employers will look to develop maturity in knowledge management and entrepreneurship, whilst also looking to reap the benefit of structural changes linked to outsourcing low end tasks.
Defining and implementing an operational excellence roadmap might just be the key to stop the vicious cycle of constantly chasing one’s tail.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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