A Bold New Strategy Restores a Bank to a Leadership Position

In 2000, a major Asia-Pacific bank was the market cap leader in its home market, but over the next two decades it lost significant ground to its peers, falling to a distant No. 4. During that woeful stretch the bank made a number of attempts to reinvigorate performance, including technology upgrades, acquisitions, divestitures, and leadership changes. Each pivot came up short; customers lost confidence in the bank, and employees were demoralized.

In 2020, the bank turned to us for help with a complete strategic transformation. This multiyear journey spanned multiple pillars of value creation and resulted in a massive reversal in total shareholder return (TSR), cost efficiency, customer satisfaction, and growth outlook.

We began by working closely with the bank and its new CEO on a complete strategy refresh. Following a careful diagnosis of its current state—including a frank look at its values, beliefs, and performance—the bank committed to becoming the market leader in business and consumer banking. From there, we helped the leadership team align on an end-to-end approach in developing a bold new strategy, from articulating a clear vision (Why are we here? What will we be famous for? Where will we grow? How will we work?) through to well-defined measures of success, a focus on end-to-end processes versus functional costs, and with each workstream led and owned by the “best and brightest” from across the organization.

That visioning exercise enabled the bank to align its organizational structure and operating model with its new strategy. An emphasis on simplification was core to its transformation: fewer projects, systems, products, and policies, with clear governance and a single point of accountability for each strategic priority. 

Key improvements to its operating model also ensured that all tech transformation priorities would be owned and driven by the business, and performance outcomes relative to established objectives and goals would be rigorously measured.

Newly streamlined and agile, the bank renewed its focus on customer satisfaction and trust by ensuring its relationship managers had ready access to the data and tools they needed to serve as intelligent advisers, and by investing heavily in its digital channels. This allowed the bank to rationalize underutilized branches and reduce call center volume. 

As it worked hard to improve a host of internal capabilities to become a truly digital-enabled organization, the bank also returned to M&A, acquiring a digital upstart and the consumer business of a competitor, further strengthening its core priorities.

This carefully phased strategy refresh propelled the bank to the top of its peer group in TSR; reduced its cost-to-income ratio from >50% to less than 45%; markedly improved its Net Promoter Score℠ in priority segments (where it now ranks No. 1 or No. 2); and increased business lending growth above its peers. 

Several factors were at the heart of the bank's turnaround: it approached strategic transformation with a clear, customer-centric vision based on carefully determined priorities; ensured its leadership team was aligned; and balanced digital investments with a revised operating model and organizational structure that made the most of its talent, improving employee morale.