麥肯錫-從銀行業(yè)的技術(shù)中釋放價(jià)值：投資者視角 Unlocking value from technology in banking An investor lens

Mcsey

&company

FinancialServicesPractice

Unlockingvaluefromtechnologyinbanking:Aninvestorlens

Investors,boards,andmanagementteamsarelookingforbanksto

demonstratedifferentialvaluefromtechnology.Ourresearchprovidesaframeworktolinktechnologyinvestmentstovaluecreation.

byAamerBaig,VikSohoni,andXavierLhuerwithZaneWilliams

?GettyImages

October2024

Overthepastfewyears,globaltechnology

spendinginbankinghasbeenincreasing9percentayear,onaverage,outpacingrevenuegrowthof4

percent.In2023,thisspendingtotaled$650billion,1whichisroughlytheGDPofBelgiumorSweden.

Despitethissignificantspending,ithasn’tbeeneasytoquantifythenetbenefits.Moreover,thebanking

sectorhasexperiencedthefollowingchallenges:

—Decliningproductivity.Laborstatisticssuggestthatsince2010,productivityatUSbankshas

beenfalling0.3percentayear,onaverage,

evenasmostothersectorshaveexperienced

productivitygains.Furthermore,thecorrelationbetweenbanks’revenuesandtheirnumberof

full-timeemployeesisveryhigh,regardlessof

theinstitution’ssize,suggestingthattheindustryhasn’tbeenabletodeliverscaleeconomieson

technologyspending(Exhibit1).

—Unclearcompetitivedifferentiation.Ifabank

spendsmoreontechnologythanitspeersdo,

itdoesn’tnecessarilyleadtoacompetitive

advantage.Forexample,alargebankandasmallbankcanbothhaveamobileappwitha4.9app

storerating,evenifthesmallbank’stechnology

spendingisatinyfractionofthebigbank’s.Banksofallsizesspendaround10percentoftheir

revenuesontechnology,andarobustecosystemofvendorsensuresthatnewdevelopmentsin

technologyarequicklycommoditized,copied,anddistributed,minimizingfirst-moveradvantages.

—Increasingcostofcomplexity.Growingdemandsontechnologyduetoregulatorycompliance,

adoptionofAI,andawaveoflegacy-systemrenewalswilllikelyrequiretheindustryto

continueincreasingtechnologyspending.ButstandardROIcalculationsoftenfailto

12024EnterpriseITSpendingForecastforBankingandInvestmentServices,Gartner,2023.

Exhibit1

Despitetechspending,productivityatUSbankshasbeenfallingandeconomiesofscalehavebeenelusive.

125

120

115

110

105

100

95

90

USlaborproductivitybysector,2010–22,1index(2010=100)

Professional,scienti?c,andtechnicalservices2

Privatenonfarmbusinesses

Commercialbanking

CAGR,%1.9

1.2

–0.3

20102022

Correlationbetweenrevenuesand

150

100

Revenues,$billion

50

numberofemployeesatUSbanks,2023

R2=0.9399

050100150200250300

Full-timeemployees,thousands

1Three-yearmovingaveragesareusedforprofessional,scienti?c,andtechnicalservicesandcommercialbanking.

2Includessubsectorssuchaslegalservices,accounting,consultingservices,computersystemsdesign,andscienti?cresearch.Source:S&PCapitalIQ;USBureauofLaborStatisticsdataasofSeptember2024

McKinsey&Company

2Unlockingvaluefromtechnologyinbanking:Aninvestorlens

acknowledgethefullcostsassociatedwitha

techbusinesscase,suchasmaintenanceof

thenewlybuiltapplication,increasedtechnicaldebtfromthecomplexitycreated,andfuture

infrastructureexpenses.Thistotalcostofownershipforanewapplicationcanoftenoutstripthebenefitsofbuildingone.

Whiletechnologyhasledtomajorchangesin

banking,asevidencedbyinnovationssuchas

mobileapps,algorithmictrading,andautomation,

quantifyingthevaluefromthesedevelopmentshasbeendifficultformanybanks,particularlywhenit

comestospecifyingwhattheyaredoingbetterthantheirpeers.

Thegrowthintechnologyspendingisnaturallydrawingincreasedscrutinyfrommanagementteams,boardmembers,andCEOs,asthey

expressedininterviewsweconductedforthis

research.Thisperceptionwasalsoreflectedin

ourinterviewswithseveralleadingequityanalysts,whereweaskedforviewsonvaluecreationandtheroleoftechnologyinbanking.Ageneralsentimentemergedthattechnologyspendingisoftenseen

asopaqueandthatthevalueenabledisuncleartostakeholders(seesidebar,“Bankingequityanalystsweighin”).

Inthisarticle,weoutlinehowbankscanextract

greatervaluefromtheirtechnologyspending—anddemonstratethatvaluetostakeholders—byshifting

thewayinvestmentsareallocatedanddrivingoutcome-basedexecution.

Currently,somefinancialinstitutionsareina

negativeloop:theyhavelimiteddiscretionary

capacityfortechspendingbutdeterminethey

needtobuildcertainsolutionsthemselves,often

becausevendors’offeringsdon’tmeettheirneeds.Intheinterestsoforganizationalharmony,these

institutionstypicallydecidewhichprojectsto

prioritizefromthebottomup,withlimitedtop-downdirection,whichresultsinalargenumberofsmall

technologyinitiativeswhosereturnsareoften

unclear.Theseinitiativestypicallydon’thavethe

criticalmassoffundingneededtoshowresults.Andbecausetheyaren’texpectedtoshowimmediate

outcomes,theseinitiativesareexecutedusingatime-and-materialsapproachthatprioritizesminimizingcostratherthanmaximizingvalue

enabled.Thisinturncomplicatesthearticulationofthatvaluetoinvestors.

Someotherinstitutionshavecreatedavirtuous

cycle.Theyuseavalue-focusedapproachand

ensurecross-functionalcollaborationamongthe

Bankingequityanalystsweighin

Aspartofourresearch,weinterviewedseveralprominentUSbankingequity

analystsabouttechnologyspending

inbanking.Herearehighlightsofwhattheyhadtosay:

“Technologyinvestmentsarelikeacalloptiononbecomingabest-in-class

digitalbank2.0,butitisunclearto

usiforwhenthisoptionwillbeinthemoney.”

“Mostofthetechnologyspendingseemstobetablestakesorrequiredtomeet

regulatoryrequirements—theshare

oftechnologyinvestmentsdriving

competitivedifferentiationseemsverylimited.”

“Technologyspendingisvery

opaque;bankswouldbenefitfrom

communicatingmoreopenlyonthevalueitenables.”

“Wehavefoundthattheamountspentontechnologyisthewrongmeasure.Infact,webelievethatthemarketshouldbemorefocusedonwhatbanksare

spendingtheirtechnologydollarson.”

“Thereisnoshortcuttovaluecreation.

Technologyneedstopositivelyinfluencetheenduring,fundamentaldriversof

bankperformancetohaveanimpactonshareholderreturns.”

Unlockingvaluefromtechnologyinbanking:Aninvestorlens3

C-suite(CEO,CFO,CIO,businessunitheads)to

ensurevaluerealizationbeyondtheCIO’soffice.

Theapproachentailsunlockingmoretechnology

capacitythroughproductivityimprovements,

concentratingtechnologyinvestmentsinasmall

numberofbusinessdomainswheretheexecutive

teamhasdeterminedoutsizevaluecanbeenabled,adoptinganoutcome-basedexecutionapproach

toensurevaluerealization,anddevelopinga

strongerarticulationofvaluetoinvestorsthatis

directlylinkedtofinancialcommitments(Exhibit2).

Thetechnologyinvestmentconundrum

Bankstendtofacethefollowingchallengeswhenitcomestotechnologyinvestmentgovernance:

—Limiteddiscretionarytechnologycapacity.

Manybanksdon’tdisclosespecificsabout

theirtechnologyspending.Atlargebanks

thatdodisclosethisdata,“runthebank”and

“mandatorychange”spendingoftenrepresentsupto70percentoftechnologybudgets.Thesecategoriesincludeinfrastructurehardwareandsoftware,IToperations,regulatorycompliance,andothertypesofunavoidablespending,

leavingonlylimitedcapacityforinvestmentsthatcandrivecompetitivedifferentiation

(Exhibit3).Technologyproductivityisalsooftenperceivedtobelow.Forexample,

developersmayspendlessthanhalftheirtimecoding,andimplementationofnewfeatures

cantakeaslongasayear.

—Lackoftop-downportfolioview.Evenin

thisdigitalage,manyexecutivesstillfeel

ill-equippedinthelanguageoftechnology

andoftendelegateimportantinvestments

tothetechdepartment.However,manytechdepartmentsfeeltheydon’tunderstandthebusinessstrategyandseekoutbusiness

collaboration.Iftheydon’treceivethis

partnershipattheseniorlevels,thelimitedamountofdiscretionary“changethebank”

spendingistypicallyallocatedbymorejunior

managerstodisparateindividualinitiatives,

andatop-downviewisnotappliedconsistentlytoensurethatspendingisalignedwiththe

businessstrategy.Thisapproachresultsin

investmentsbeingspreadtoothin,asopposedtobeingconcentratedinafewstrategicareasoffocus.Fundingallocationrefreshesare

alsooftenmadewitha“l(fā)astyear,plusabit

Exhibit2

Byadoptingavalue-focusedapproach,bankscancreateavirtuouscycletounlockhigherreturnsfromtechnologyspending.

Typicalapproachvsvalue-focusedapproach

Discretionarytechcapacity

Bottom-upprioritizationof

limited

very

investments

Negative

loop

InabilitytoExecution

articulatetruevalue

onatimeandmaterialsbasis

to

Strategicallocationof

Majorchangeindiscretionary

tech

capacity

investments

Virtuous

cycle

TransparencyOutcome-

basedtechdeliverymodel

ontech-enabledvaluecreation

McKinsey&Company

4Unlockingvaluefromtechnologyinbanking:Aninvestorlens

Exhibit3

Discretionarychangecapacityinbanks’techspendingistypicallylimitedandcanbeoptimizedtobringmorevalue.

Exampleoftechnologyspendingbycategory,%oftotal

Currentstate

Targetstate

“Runthebank”MandatorychangeDiscretionarychange

50–60

10–15

25–35

40–50

10–15

35–45

Typesofdiscretionarychange

laTechnologytransformationInitiativeswithrevenueLong-termstrategicbets

andmodernizationand/orcostbusinesscase

McKinsey&Company

more”mentality,insteadofreallocatingbasedonperformanceandmerit.

—Insufficientfocusonoutcomes.Aninitiative’s

successisoftenmeasuredbywhethercode

wasreleased,notbywhetherthebusiness

valueexpectedwasrealized.Assuch,operatingbudgetsforareasaffectedbythetechnologicalchangeareoftennotadjustedtoaccountfortheexpectedfinancialimpact.Thislackofoutcomeorientationpermeatestheincentivestructure,

includinghowsystemsintegratorsareevaluatedbyprocurementgroupsthatfrequentlyvalue

lowunitcostsoverqualityorimpactgenerated.Thisisalogicalapproachtotakeifthereisno

cleararticulationofthevaluetobeenabled,

sothefocusistypicallyonminimizingcosts.

Unfortunately,qualityoftensuffersasaresult.

Thisledoneexecutivetosay,“TheonlythingIgetfrompayingby‘timeandmaterials’isinvoicesformoretimeandmorematerials.”

—Inabilitytoarticulatetruevalue.Asaresult,the

CEO,board,andinvestorsmaynotgettheclaritytheyseekaboutthevalueenabledbytechnologyspending,andthey,too,mayenduptreating

techasanexpenselineitemtobereduced.Thissituationexacerbatesthenegativeloopwe

described,ascompressedspendingleadsto

morefragmentationofinvestmentsandreducesthequalityofvendorandinternallabor,resultinginmoreincrementalprogress,slowerdelivery,

andpooreroutcomes.

Bankscanbreakthisnegativeloopandmovetoa

virtuouscycletoextractmoretangibleshareholdervaluefromtechnology.Anexecutiveexplained,“If

youwanttotellinvestorsapowerfulvaluecreation

narrative,thenworkbackwardfromthatandallocateinvestmentsaccordingly.”

Investingstrategicallytodriveshareholdervalue

Toassesswheretoinvestintechnology,bankscanuseacombinationofapproaches.

Atthestrategiclevel,executivescanconsiderthe

fundamentaldriversofvaluationinthebanking

industryandfortheirbank’sstockprice.Theymaythenbeabletolinktechnologyinvestmentstothosedriversandtothefinancialinformationtheyprovidetotheirboardandinvestors.

Similarly,atamoremicrolevel,firmscanuse

objectivesandkeyresults(OKRs)tolinktechnologyspendingmoretightlytotheircorporatestrategy

Unlockingvaluefromtechnologyinbanking:Aninvestorlens5

andspecificbusinessoutcomes.OKRsspell

outthecompany’sprioritiesintermsofspecific

accomplishmentsandperformanceimprovements.Whilenosinglemethodologyisapanacea,the

principleoflinkingtechnologyworktoitseventualimpactcantransformhowincentivesworkwithinacompany.

Industry-leveldriversofvalue

McKinseyconductedanindustry-levelanalysistodiscernwhichfactorsdrivethemostshareholder

valueinbanking.Thisnaturallydoesn’tapplyto

anysinglebankperfectly,butabankcouldusethiskindofanalysisasastartingpointtocontextualizeitsownstrategyanddeterminetechinvestments

accordingly.

Ourreviewofmorethan90USbanks’financialresultsbetween2013and2023indicatesthat

theydeliveredtotalshareholderreturns(TSR)of10percentayear,onaverage.ButbanksinthetopdecilehadTSRof18percent,outperformingbanksinthebottomdecilebyanimpressive14percentagepoints.

ToidentifywhatdrivessomebankstooutperformtheirpeersinTSR,weconductedaregression

analysisacrossdozensoffinancialvariables,

includingtotalassets,revenues,businessmix

(retail,wealth,commercial,etcetera),netincomepershare,loan-to-depositratios,loanloss

provisions,capitalratios,andothers.Ouranalysisrevealedthatfiveoperationalmetricsaccount

foralmost90percentofthedifferenceinTSR

betweentop-decileandbottom-decilebanks

(Exhibit4),withallbutthefirstrelatingtoreturnontangibleequity(ROTE):

—revenuegrowth

—earningassetyields(howmuchincomethebank’sassetsaregenerating)

—costoffunds(howmuchinterestthebank

needstopaytodepositorsandtootherbanks,institutions,andinvestorsthatitborrowsfrom)

—noninterestincome(incomeearnedthrough

feesotherthaninterestincomeonloans,such

asmonthlymaintenancefeesonaccountsandoriginationfeesonmortgages)asaproportionoftangibleassets

—operatingexpensesasaproportionoftangibleassets

Afewcaveatsapply,however.Becausewe

conductedthisanalysisduringarelativelybenigncreditperiod,loss-relatedfactorsdidn’tcarryasmuchweightastheywouldduringastresscycle.Thisanalysisalsodoesn’tcapturetheeffectsofsavvyM&A,especiallyacquisitionsthatmight

deliverdisproportionatevaluebasedonthe

pricepaidforthem.Finally,thisanalysislooksatdifferentialperformance,sowhilesomefactorsmaybeimportanttoabank’sTSR,theymight

notbedifferentiatingifallbanksareperformingequallywellonthem.

Severalinsightsemergedfromouranalysis.

WhilethedriversofROTEprovedtobethemost

importantvaluecreationdriver,accountingfor

about55percentofthedifferenceinTSRbetweentop-decileandbottom-decilebanks,revenue

growthwasthesinglemostimportantvariable,

accountingfor34percent.Variousbalance

sheetdriverssuchastheloan-to-depositratioaccountedfor11percent.

WithinROTE,earning-assetyields,costof

funds,andfeeincomeasashareoftotalrevenueaccountedformorethan90percentofthe

differenceinTSR,whilecontrollingoperatingexpensesrepresentedlessthan10percent.

Inotherwords,reducingoperatingexpenses

wasoneofthesmallestdriversinouranalysis.

Expenseefficiency,thoughitcandeliverrelativelypredictableandrapidresults,isnotsufficient

tomakeabankoutperformitspeers,possibly

becausemostpeerscaneasilypullthesame

lever,therebymakingitlessdifferentiating.This

isanimportantinsight,especiallygiventhat

businesscasesfortechnologyinitiativesareoftenpredicatedsolelyonefficiencysavings.

Stabilityovertimeisrewardedbyinvestors,too.BankswithconsistentrevenuegrowthandlessvolatileROTEstendtooutperformtheirpeers.

6Unlockingvaluefromtechnologyinbanking:Aninvestorlens

Exhibit4

FiveoperationalmetricsaccountformostofthedifferenceintotalshareholderreturnsamongUSbanks.

ShareofTSRdiferencebetween

11

100

top-decileandbottom-decile

banksattributabletoeachdriver,1

%oftotal<1

5

LoanlossOther

provisionsfactors2

toassets

16Operating

ReturnontangibleBalancesheet

Growth

equitydrivers

23

34Earning-assetyields

Net

interestmargin

11

Costoffunds

Noninterest

income

toassets

expensestoassets

E代ciency

Assetquality

Otherfactors2

Share

offee

income

Revenuegrowth

TotalTSRdiference

1Basedondatafrommorethan90USbanks,2013–23.

2Includesloan-to-depositratio,ratioofcommercialloanstooverallloans,andcapitalizationlevels.Source:S&PCapitalIQ;company?lings,McKinseyanalysis

McKinsey&Company

Somemetricsthatwethoughtmightbeimportanttobanks’strongTSRperformanceturnedoutnottobe.Forexample,assetsizewasn’tastatisticallysignificantfactor,indicatingthatscaledoesn’t

necessarilyleadtohigherTSR.Bothsmalland

largebankscanachievesimilarmargins,andwhilesomesegmentsdowitnessscaleeffects(such

asinpaymentsandcapitalmarkets),thebankingindustryasawholedoesn’tseemtoexhibitascalecurve.Althoughthebiggestbankshavescaleontheirside,theycanbeimpededbyorganizationalcomplexity,afragmentedtechnologylandscape,andmorestringentregulatoryrequirements.

Amongothervariablesthatdidn’trisetothetopwasbusinessmix,possiblybecausemanyofthebanksweexaminedhavesimilarprofiles,orbecauseits

effectshowsmorestronglyinothervariablesliketheshareoffeeincome.

Bank-specificprioritizationofvaluedriversandoutcomes

Bankscanconsiderprioritizingvariousvaluedriversdependingontheirrelativeperformanceagainst

industrypeers.Forexample,bankswithahigh

ROTEandrobustrecordofenablinggrowthcouldfocusonimprovingexpenseefficiencyinawaythat

Unlockingvaluefromtechnologyinbanking:Aninvestorlens7

doesn’thamstringgrowth.Bankswithrelatively

lowerrevenueperformancemayconsiderputting

capitalbehindlonger-termstrategiestoincrease

revenueandimprovetheirnetinterestmarginversusshort-termexpensecuts.

Differenttypesofinstitutionscouldvaryintermsofrelativeemphasis.Forexample,regionalandmidcapbanksmaywanttofocusonincreasingfeeincome,whichtypicallyrepresentsalowershareoftotal

revenuethanitwouldatlargerbanks.Consumer

financespecialiststypicallyhavehighassetyieldsandmaywanttostrivetogatherlow-costdepositstofurtherimprovetheirnetinterestmargins.The

biggestbankshavearelativelyhighshareoffee

income,sotheymaywanttofocusondriving

efficienciesinanefforttobenefitfromtheirscale.

Thiskindofthesisconcerningbusinessprioritiesshouldgroundtheinstitution’soverallstrategy

andinformtechinvestments,settingthestageforaligningoutcomes.

Atthemicrolevel,forinstance,whenchoosing

whethertoinvestinamobileapporinaplatformforbranchemployees,linkingtheworktoOKRsisoftenhelpful.Investinginthemobileappcouldboost

digitalsalesandself-service,whilereducingbranchfootfallandcontact-centervolumes.Investingin

abranchplatformmightimprovein-branchsalesandemployeesatisfaction.Businessleaders

shoulddeterminewherethegreateropportunity

lies,basedonthecorporatestrategyandexpectedfinancialoutcomes.BytrackingOKRsovertimeandhardwiringthemintotheobjectivesofintegrated

technologyandbusinessteams,theCFOcouldensurethattheexpectedfinancialimpactof

technologyinvestmentsisachievedandcan

eventuallybecommunicatedtotheCEO,board,andinvestors.

ItiscriticalforOKRstoformasystemthatalignstheobjectivesofindividualteamsandgroupsofteamstoenterprise-levelpriorities.

Fiveexamplesofstrategicthemesfortechnologyinvestment

Toidentifyexamplesofhowafinancialinstitution

canalignitstechnologyinvestmentswithdrivers

ofstrongTSRperformance,weanalyzedinitiativesthatbanksinourdatabasehaveundertakenover

thepastfewyearsandmappedthosetothedriversofdifferentialvalueidentifiedabove.Ouranalysis

revealedfiveexamplesofstrategicthemesforbankstoconsider(seesidebar,“Adeepdiveintoexamplesofstrategicthemesfortech-enabledvaluecreationinbanking,”attheendofthisdocument):

1.expandgrowthandnetinterestmargin

throughdata-drivenrelationshipbanking,forinstance,throughpersonalizedoffersenabledby360-degreecustomerdatatoattract

operationaldeposits

2.boostrecurringfeeincomethroughtech-

enabledbusinessbuildinginpayments,wealth

andassetmanagement,andtransactionbanking

3.improveoperatingleverage—thebank’sability

toincreaserevenuewithoutproportionally

increasingcosts—andcustomerexperience

throughdigitizationanduseofAI,forexample,inself-servecustomeronboardingandback-officeautomation

4.preventvaluecompressionthroughtech-

enabledriskmanagementandcompliancesuchascybersecurity,resiliency,creditunderwriting,andfinancial-crimeprevention

5.optimizetechnologyproductivity,timeto

market,andoutcomeorientationbypursuing

engineeringexcellence,platformmodernization,anddataandAIenablement

Eachofthesefivestrategicthemesmapstothe

valuedriversrevealedinouranalysis.Specific

outcomemetricsalignedwitheachthemecouldbeusedtotrackvaluerealization.

8Unlockingvaluefromtechnologyinbanking:Aninvestorlens

Thefirstthreestrategicthemesinvolveharnessing

technologytohelpboostrevenuegrowth,feeincomeasashareoftotalrevenue,andassetyields,while

loweringcostoffundsandoperatingexpenses.With

thesestrategies,itisimportanttonotethattechnologyisanenablerofabroaderbusinesstransformation,

andthatnontechleversneedtobepulledaswell,

including,forexample,thehiringofbankers,businessprocesschanges,adoptionoftechnologybyfrontlineemployees,andmarketing.M&Acanalsoplayacriticalrole,particularlyinincreasingfeeincome.

Thefourthstrategicthemeisfocusedonensuringthatthebank’stechnologyisresilientenoughtowithstandcyberattacks,systemfailures,andothershocks;thatitenablesriskmanagementmorebroadly(including

preventingfinancialcrimeandoptimizingcreditrisk);thatitreducestechnicaldebtthathasaccumulated

overtheyears;andthatitcomplieswithregulations.Makingsufficientinvestmentsinthisareaiscriticaltopreventingvaluecompression.

Thefifthstrategicthemeentailstransformingthe

technologyfunctionitself,withtheobjectiveof

improvingengineeringproductivity,accelerating

timetomarketfornewsolutions,ensuringastrongerdeliveryorientationtowardbusinessoutcomes,and

creatingmorecapacitytoinvestintheotherfour

themes.Moreover,manyorganizationsarefindingthattheproductdevelopmentlifecycle,includingsoftwaredevelopment,isoneoftheareasthatcanbenefitmostfromgenerativeAI.

Basedonouranalysis,weestimatethatatypical

bankcouldenableROTEimprovementsofthree

tofourpercentagepointsbypursuingoneortwo

ofthetech-enabledbusinessstrategiesaswellas

thetech-enabledriskmanagementandtechnology

transformationthemes.Itisunlikelythatabankwouldchoosetopursueallfivethemesatonce,duetothe

investment,talent,andtimeneeded.

Implicationsforbankexecutives

Ourresearchindicatesanopportunitytoelevate

banks’approachtotechnology,turningitfroma

budgetlineitemintoanuncontestedenablerofvalue

creation.Bankexecutivescanconsiderfollowingthisapproachinacontinuouscycle:

—Freeupdiscretionary-technologycapacity.

Acceleratethetransformationofthetechnologyfunctiontoincreasecapacityavailablefor

discretionaryinvestmentby50percentormore(suchasbyincreasingengineeringproductivityandoptimizingrun-the-bankspending).

—Allocateinvestmentsstrategically.Addatop-downapproachtosupplementtheusualbottom-up

generationoftechnologyinitiativesbasedonROIaspartoftheyearlystrategic-planningprocess.

Accomplishthisbyconductingananalysisofthe

bank’smarketvaluationtoprioritizeenduringvaluecreationdriversanddefinestrategicinvestment

themes.Ensurethatcapitalismostlyallocatedtoafocusedsetofbusinessdomainsthataligntothosethemes,decideonwhethertobuildorbuyspecifictechsolutions,andtranslateeachinvestmentintoOKRsthatarehardwiredintobudgetexpectationsandintegratedteamincentives.Considerthe

fullburdenofnewtech,notjusttheinitialcosts.Thisstrategicprocessisacriticalfoundationonwhichtobuildanarrativeforinvestorsaboutthevalueenabledbytechnology,anditcanenableadynamicreallocationofcapital.

—Executewithanoutcomeorientation.Be

purposefulabouttheoperatingmodelthe

organizationuses.Forinstance,aplatform

operatingmodelcouldensurethatexecution

isconductedthroughcross-functionalteams

focusedondeliveringbusinessoutcomesatan

acceleratedpace.Establishaquarterlyoutcome-basedreviewusingtherelevantOKRstoensurethattechnologysolutionsareadoptedandthe

financialimpactisrealized.

—Providetransparencyontech-enabledvalue

creation.Somebankslinktheirtechnology

investmentstotheirinvestorguidanceonrevenuegrowthandROTEtargets.Theyincorporatethis

intotheirinvestorcommunicationsandshine

alightonthemetricsthatmatter(forexam