Financial Market Research: How The Financial Services Industry Makes Daily Operating Decisions


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This is the second post in an ongoing series examining the insights from our previously published research applying ROAR analyses of speed, predictability, flexibility, and leverage to business performance. Our first post dug deeper into the healthcare industry.

Today’s spotlight focuses on the insights from conversations with those in the financial services industry. During our research, we spoke to 21 participants comprised of CEOs, SVPs, VPs and other executives from banks, insurance companies and investment service companies. As we talked to these leaders, five key trends within the financial services industry emerged.

1. The financial services industry views themselves as certain, rather than dynamic.

When questioned about predictability and performance, financial services executives spoke of certainty above all else. As a group, 72% chose predictability as the most important focus for their organization – the highest degree of alignment seen across all industry groups. They frequently cited government regulation and the negative consequences of inconsistencies as a driver of this approach, but they also used certainty as a proxy for the idea of the stability that consumers are perceived to desire from financial institutions. Considering the recent performance of the financial industry as a whole, and the rapidly changing way people are interacting with their financial institutions (banks, financial advisors and insurance companies in particular), is there room for a more dynamic approach within the industry?

2. Other than a focus on certainty, there doesn’t seem to be a “tried and true” approach within the financial services industry.

While the executives were clearly aligned on predictability, we saw very little agreement on how financial services organizations should operate in terms of speed, flexibility and leverage. This could mean a couple of things: either there are a number of successful approaches to choose from, or nobody knows what is actually working – except for the need to be predictable.

3. Regardless of approach, financial services organizations are meeting financial goals.

Over 80% met their revenue goals, and just over 75% met their profit goals, which was the highest number for any industry group.

4. Yet, by our metrics, the financial services industry is struggling.

Through our research, we evaluated organizations on three primary criteria:

  • Were they meeting financial goals?
  • Were they meeting operational goals for speed, predictability, flexibility and leverage?
  • Did they align operating decisions to what their customers value?

Of the 21 financial services organizations, two qualified as top performers. While a majority of these organizations met the financial goals criteria, only six additional organizations (besides the two top performers) were able to meet operational goals or customer value alignment goals.


5. Top performing organizations operate differently.

When comparing the financial services industry to the top performing organizations across all industries, there are noticeable differences. While the financial services industry is driven by predictability and certainty, top performers see being swift and nimble as top priority.

Top performers in financial services very much reflect the industry’s overall emphasis on predictability. Where they differed – and aligned with other top performers – was a focus on being swift and the ability to hit their goals.

If your organization is in the financial services industry, what drives your decision-making? Looking at the Venn diagram above, how many of the criteria are you currently meeting? If you were to align your operating goals to what your customers value, would it change the way you think about Speed? Predictability? Flexibility? Leverage?

Republished with author's permission from original post.

David Morefield
David Morefield is an Associate at Aveus and is known as their Renaissance man because he adapts to any client challenge, environment or schedule with enviable ease.


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