How Banks Set Strategic Priorities
September 21, 2023
Banks and Strategic Priority Setting
US bank executives are using a range of tools in setting strategic priorities, according to CCG Catalyst’s US Banking Study 2023. (This study forms the basis of our recent report The Banking Battleground 2023: Pulling Back and Pushing Ahead.) Specifically, four of the seven possibilities asked about — internal discussion, end customer research, external market research, and vendor meetings — are being used by at least half of respondents. While the study did not ask to what extent executives are leveraging each of these tools, this data is quite refreshing as it suggests that banks in the US are casting a relatively wide net in looking to inform their decisions.
However, there is some cause for caution in these findings. Despite the range of tools used, internal discussion was selected most often by respondents as part of their arsenal, of all of the options listed. This means that, even though banks largely are diversifying their knowledge sources, turning inward in some capacity is more likely than not part of their approach. This isn’t necessarily a bad thing — as part of a holistic approach to priority setting, internal discussion is crucial for healthy debate — but it could be detrimental if it is not being used effectively in tandem with other means.
What does that look like exactly? Well, we’ve already established that banks are pretty good at leveraging other avenues for market knowledge — in particular, end customer research (which came in second) is an important lever in helping to understand where to go next. The risk lies in collecting all of this data and then allowing internal discussion to overtake it when it comes to actually setting priorities. Essentially, that means allowing subjective opinions to tip the scales, rather than using internal discussion as a way to think critically about external information. This is only natural — a strong mind is part of what makes a good leader. But making sure to balance your perspective with what you’re seeing elsewhere is crucial to developing priorities that make sense.
As bank executives contemplate this data, a good exercise may be to look at your own approach to priority setting with a critical eye. How much do you rely on internal discussion to make strategic decisions? To what extent are you leveraging other tools, and how so? Are your conversations informed by those other tools? And what is driving those conversations? You may find that you’ve got a great setup, with well-informed debate leading the way. Or you may find there is room for improvement. Either way, taking the time to ensure that in-house thought alone is not the prevailing force behind your decision-making process is worthwhile. As with most things, objectivity is key.