At the end of 2009, the Operations Council conducted an agenda poll, asking hundreds of Operations executives what their top strategic priorities would be for the coming year. One survey finding that jumped out immediately was the low percentage of executives who saw improving agility as a top priority (just 8% of the sample—the only category that generated less interest was “Other”).
This statistic surprised and confused us, especially when taken in the context of two other data points: one, that nearly 90% of executives across industries cite agility as a key competitive differentiator for 2010; and two, that 38% of Operations executives think they are performing below target on their agility goals (a higher percentage of below-target performers than any other category). Putting the pieces together, the message we saw was this: Operations executives know agility is important, but for some reason they are failing to address it, and as a result, institutions’ performance in this area suffers.
As we spoke to our members about the topic of agility, we started to understand why many financial services Operations functions were leaving the issue unaddressed. A few consistent misconceptions came up in our conversations—urban myths, if you will, about operational agility. One of the biggest myths is the belief that there is a tradeoff between agility and that most sacred of Operations’ goals: cost efficiency. In the face of such a tradeoff, a majority of Operations executives, not surprisingly, chose efficiency.
I can tell you the agility-cost efficiency tradeoff is a myth because the Council has collected the data to prove it. As a part of our agility research initiative, we conducted a member survey, asking Operations executives to rate their effectiveness in several dimensions of operational agility, defining “agility” as “the ability to meet changing customer and business needs more quickly than one’s competitors”.
The survey data has enabled us to dispel a number of myths held by many Operations executives in the industry. Learn more about the myths we have refuted around operational agility—and see how becoming agile is probably a lot easier than you think—by reading The Truth About Operational Agility: Six Myths About Operations Role in Developing an Agile Organization.
Boomers are taking control of their finances – unless banks demonstrate how their products help, they will become a casualty of newly engaged boomers looking for change.
We’re currently finalizing the design of a quantative project that will allow us to discern how good banks and insurance companies are, from an operational perspective, at responding to internal and external customer demands, as well as the impact that responsiveness (or operational agility) has on key success measures such as unit costs, operating margins and revenue growth. The big argument on the team is whether in a Financial Services environment, Operations can have ANY impact on revenue growth through an avenue other than service fulfillment. I say yes – not only CAN Operations impact revenue, they MUST enable revenue growth in order guarantee organizational success and protect efficiency gains. Some of my colleagues say nay, that is not Operations’ job, leave that up to the revenue folks. Let me tell you why I think they are wrong, and ask you to settle the argument for us.
A byproduct of changes to Regulation E is the future of the checking account. Will the industry abandon free checking and return to the more traditional banking practices of charging account maintenance fees? While the full impact remains to be seen, customers are sharing their views on a fee-based world.
Over the December holidays, I was visiting family in India, and despite everything you read about rapid economic development and the expanding middle class, the poverty so many people experience there is still striking. However, the poverty I saw this time looked very different than what I’ve seen in previous trips. People still live in flimsy shacks, but now they have televisions in those shacks. In the big cities, mobile phones are everywhere. In the past, large populations of the “unbankable” seemed completely out of the reach of traditionally structured financial institutions. These days, in countries like India, large bands of the population can be served through channels that were never an option before, like the mobile phone. 
I was speaking with a friend the other day about the proposed financial regulations here in the U.S., including the creation of a Consumer Financial Protection Agency. Industry opposition to the CFPA brought to mind an incident in high school.
Today’s post isn’t really Operations related. In fact it’s not necessarily Financial Services related though it is related to finance…sort of. It’s really about spending and consumer behavior. My colleague, 
Most recently, I’ve been exploring the Future of Retail Banking (upcoming posts will preview the Council’s predictions). Through my work, I learned that it is important to have a firm understanding of today’s realities in order to gain a window into the future. One reality that has become increasingly clear to me is that banking is becoming a social right rather than a privilege. Just see a few examples of “banks” that are bringing a social purpose to financial services: 