What connected planning means for financial services

In September, we gathered together financial services specialists from the UK, Belgium, France, and Germany at our Anaplan European Financial Services Summit. Featuring speakers from companies such as The Financial Times, RSA, Provident-Satsuma, AXA, Deloitte, Aviva, 3i, and NewDay, the event focused on how connected planning can help the financial services industry become more agile—and above all, more digital.

In an industry where, to quote our recent joint survey with the Financial Times, “the unexpected feels like an almost daily occurrence,” effective planning can feel like an impossible task. Financial institutions are in an environment where they have to adapt to constant regulatory, technological, and market changes.

We all know the organizations that succeed are the ones that adopt a forward-looking focus and have the ability to adapt faster than others—whether it’s the changes Brexit will have on regulations within the EU financial market, evolving trade agreements, or the after-effects of natural disaster. Financial institutions have never had a greater need to be ready for any possible scenario.

Digital transformation is the single biggest challenge facing the financial services industry today, and one that is inextricably bound up with its other two challenges of cost reduction and regulatory pressure. Customers are driving this change by increasingly demanding that banks and other financial institutions change the way they do business. And these customers won’t settle for the status quo: If they don’t get what they want, they will go elsewhere. This revolution—it has come about too quickly to be an evolution—holds both opportunities and threats.

What financial institutions need to succeed in these challenging times

To overcome the threats and take advantage of the opportunities, banks, insurance carriers, and investment management companies need to be forward-looking in everything they do. First, they need speed to run faster cycle times and get ahead of the competition. Second, they need agility to respond to market volatility, regulatory changes, and digital disruption in as close to real time as possible.

Currently, most are nowhere near ready. According to a 2016 study from Harvard Business Review, while 81 percent of financial institutions have plans to change and 85 percent consider timely change to be important, only 33 percent feel they have managed to achieve it.

Poor planning lies at the heart of this inability to change. And according to our Financial Times survey of 50 financial services retail banking executives, the biggest planning challenges on the horizon are customer demand, digital transformation, data, and analytics.

By bringing both speed and agility to their business process, financial services firms gain greater visibility to better predict and respond to market threats and opportunities, and are able to leverage richer data to support planning and decision-making.

The importance of bringing together data, people, and plans

Data is particularly key. Within most financial institutions, data is siloed and often inaccurate, leading to disjointed and ineffective planning—in fact, inaccuracy and the use of multiple interfaces were cited as leading modeling challenges by survey respondents. Only connected planning—planning that brings together data, people, and plans from across the business—can help organizations break this cycle and start connecting plans with business strategy and action. As Nigel Armstrong, Head of the Anaplan Center of Excellence at RSA said, “Connected planning allows you to create multiple integrated models in a way that means your financial plan is no longer just your financial plan. It’s your business plan.”

Thomas Keymolen, Manager of Finance Transformation at Deloitte, pointed out that “in a changing environment, you need to take into account ‘what-if’ scenarios in your strategic planning to allow you to react with speed and agility. This ability can completely change the relationship between operational and financial data in a way that empowers business managers to take responsibility for results.”

For Gregory Vanden Berghe, Senior Expert Cost Management at AXA Belgium, the value lies in the harmony it brings to the business: “Connected planning puts finance at the head of the process and gives the business ownership of the figures. The roles are clear and there’s no conflict.”

Are banks adapting quickly enough to stay competitive?

So what are banks doing about addressing their challenges? The survey revealed that while the connected planning approach is on their radar, few are doing enough to become as flexible and agile as they need to be. Fewer than half of banks are using cloud-based planning, and many admit they have a limited ability to see how different scenarios will affect the whole business.

This doesn’t mean that banks are ignoring the problem. Ninety-six percent have plans to adopt more cloud-based technology within the next three years and 54 percent consider forward-looking planning to be a high business priority. But is their timeline aggressive enough given how quickly digital change is taking place? Read Financial Times’ research report to see whether you are ahead of competition or falling behind.

How connected planning will transform banking

Read paper