As banks reconsider their strategic outlook in challenging market conditions, they must have a flexible approach to foster growth and combat stagnation. In the past, financial services organisations may have relied on spreadsheet-based tools for forecasting and performance management, but these tools are now insufficient. It’s crucial for companies in the sector to implement an effective enterprise performance management (EPM) system to provide more sophisticated budgeting, forecasting and reporting functionalities to assess overall business health.
Like any other industry, financial services struggles with challenges that limit a company’s ability to optimise profitability and strategic growth. Many of these are common issues faced by organisations in other sectors, but some have a unique impact on business performance as a result of the specific demands of a highly regulated and complex operating environment.
For example, product and functional heads often lack clear visibility into their areas, making it challenging to take timely corrective action. This lack of transparency can lead to misaligned priorities and missed opportunities for optimisation. In fact, the planning process of many banks is disconnected from their strategic goals, partly as a result of inconsistent data across functions, and partly due to a reliance on manual tools and processes and a limited capability for scenario planning.
Addressing these challenges is not only essential to allowing financial services organisations to make the informed, timely decisions that are essential to continued business success, but is vital to ensuring that the company can meet the customer, industry and regulatory demands of the future. EPM has started playing a critical role in helping financial services organisations to tackle many of their challenges, allowing them to modernise, stay competitive and become more agile.
Driving strategic agility
Financial services organisations face constant regulatory, economic and customer-driven change. EPM enables continuous planning and rolling forecasts, helping companies shift from static annual plans to dynamic, scenario-based strategies. This allows for faster adaptation to market disruptions, interest rate swings and competitive threats.
AI-enabled EPM platforms, for example, are transforming how scenario planning is done, enabling banks to run complex what-if scenarios quickly and efficiently, allowing them to anticipate and respond to changes with greater agility. Generating predictive models that incorporate a wide range of variables, including market conditions, regulatory changes and consumer behaviour trends, AI provides deeper insights and more robust strategic options.
EPM’s most important capability is its ability to unify data across products, risk and operations, creating a single source of truth. This proves the granular insights needed to drive strategic objectives, helping financial services organisations align operations with overall business strategies and facilitating more informed decision-making and better risk management. Modern EPM platforms integrate with ERP, CRM and data warehouses, breaking down silos so advanced analytics and AI-driven forecasts can provide real-time insights into profitability, risk and operational performance at a granular level.
EPM’s ability to break down silos also helps banks generate more accurate pricing, a better product mix and stronger financial health. By unifying planning across finance, risk, compliance, HR and operations, EPM ensures that everyone works off the same data and assumptions, reducing conflict and aligning goals.
Aligning strategies with long-term growth
With a comprehensive suite of financial planning and performance management tools, EPM is the only way to gain an accurate, holistic view of an organisation’s financial health. By integrating data from across the organisation, while also identifying emerging trends and opportunities, EPM allows financial services organisations to stay ahead of the competition and capitalise on new market opportunities.
By adopting the right EPM solution, financial services organisations can enhance risk-adjusted profit performance, improve capital and liquidity planning, drive revenue growth and optimise cost management. Providing more precise insights into the profitability and risk profile of different products and business lines, EPM enables banks to assess the risk-return trade-offs of various business decisions. Similarly, integrated modelling and data management allows banks to ensure that capital and liquidity planning align with strategic objectives.
Financial institutions face complex compliance demands, but EPM makes navigating risk and compliance much faster and easier. EPM helps standardise reporting, track key compliance KPIs and simulate the impact of new regulations, reducing the risk of errors and fines while providing more transparent and auditable processes. EPM’s ability to incorporate the most complex reporting requirements is also helping financial services organisations navigate growing demands for sustainability and ESG metrics.
In a sector where speed, compliance and trust are everything, EPM is becoming the digital backbone of agile, forward-thinking financial services firms – unlocking smarter forecasting, tighter controls and more resilient business models. Providing the tools and insights needed to navigate complexity, stay compliant and drive growth, EPM is fast becoming the foundation of the financial services organisation of the future.
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