Over the past five years the demands placed on planning organizations at large banks have shifted dramatically, with the challenges of forecasting in an uncertain environment compounded by heighted expectations — both internal and external — for what bank planning functions should deliver.
Many G-SIBs have begun the journey to enhance their planning processes to meet these new expectations, but we are still in the early days and there is a long road ahead. Challenges abound across capabilities, competencies, and culture.
By building more fully integrated processes, we believe planning functions can move beyond simply aggregating annual budgets to delivering strategic insights and value to the franchise. Doing so requires that banks:
- Articulate a clear vision for planning to guide future investment
- Review alignment/integration of baselining planning and stress-testing to ensure coherent and consistent approaches and assumptions
- Move from gold-plated “precision” to strategic accuracy
- Accelerate planning capability builds
- Re-skill and reinvigorate the planning function
- Drive accountability in the business
We begin by reviewing how the environment has changed in recent years and the implications for planning functions. We then outline how some banks are responding to the increased demands and identify what we see as the major remaining gaps across the industry. Finally, we conclude by expanding on the above recommendations to guide banks as they seek to upgrade their planning functions.