Banking and capital markets: Operating in the future

Is your operating vision clearly defined?

The future started yesterday. With bank revenues increasing again, particularly in investment banking, there is a danger that the lessons learned in the stress environment created by the financial crisis will be forgotten and structural issues within both the industry and individual institutions will be put to one side, only to resurface in the next crisis.

PricewaterhouseCoopers1 analysis shows that structural failings within operating models, whilst exposed by the financial crisis, were clearly visible pre-crisis. The balance between short-term maximisation of Return on Equity (RoE) and the controls, processes and systems that should have created a focus on sustainable profit was lost. In conceding this point we have to accept that, regardless of changes to business strategy, the operating models that deliver the strategy will need to undergo structural change.