Rebooting Bank Strategy For The Digital Era

by Darren Oddie
Strategy Director, Wipro Digital
@DarrenOddie

Does the best CEO in banking have the best bank strategy? What would that strategy entail? How does the digital landscape change the way bank strategy is defined?

There are copious writings on digital strategy, suggesting a multitude of ways CEOs or strategists define their banks’ strategies.

When you read the stated strategies of banks on the Bloomberg list, or on a bank’s website or annual report, you’ll see statements regarding superior RoE, sustainable growth, transformation, customer centricity, the best at x, the leader of y, relentless focus on z, improving lives, enhancing connections, quality of service, going the extra mile, and so on…

Are any of these the best strategies?

When you see headlines such as Europe’s banks need coherent business mix, Killing the Blandness That Plagues Banking Brands and How To Improve Bank Culture? Fire More Bankers, it seems an appropriate to question to ask.

The Strategy Verbal Tic

In Good Strategy/Bad Strategy, author Richard Rumelt states : “The word strategy has become a verbal tic…a mishmash of pop culture, motivational slogans, and business speak…it short-circuits real inventiveness and fails to distinguish.”

He explains that the core content of a strategy contains three elements, which I briefly summarize here:

• Diagnosis - that defines or explains the nature of the challenge

• Guiding policy – for dealing with the challenge

• Set of coherent actions – designed to carry out the guiding policy

As you can see, good strategy is not about setting goals, financial targets or spouting platitudes. As Rumelt proposes, “Good strategy is built on functional knowledge about what works, what doesn’t, and why…The most precious functional knowledge is proprietary.”

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