The Bold War

Benefits Culture

The local benefits conundrum has gripped the UK press over the last 12 months.  There are calls for changes coming from all corners of the country.  Critics are adamant that the current benefits structure is seen to reward the wrong behaviours.  I for one feel that the UK banking industry is going through a similar benefits crisis.  The culture of demanding and faking benefits has been at the core of UK banking’s failure to move on from legacy processes, technology and products. Approving a project because it meets an artificial benefit figure should never be your sole decision criteria.   

A recent report by Forrester has confirmed what we already know; most banks have little to no clue of what benefits they are delivering.  They aren’t defining them well and they aren’t tracking them at all.  This is creating huge challenges at both ends of the project delivery lifecycle.  Benefits identification is an important part of framing new products and services.  They sharpen the eye and ensure that propositions are defined in the context of meeting certain objectives.  They should never however be the sole decision factor for determining whether to proceed with an initiative or not. 

Some banks are so adamant that everything needs to make money that they ignore the improvements customers demand.  This benefits culture can lead to some appalling behaviours.  This includes calculating inflated benefits (to hit a number), and a fixation on product sales and cost cutting initiatives that don’t have the right outcome – improving the customer experience.  Probably the most damning evidence of this is Internet banking.  The very reason banks invested in this new channel was not to meet a customer need.  It was because some bright spark worked out that Internet banking delivered a lower cost to serve.

By looking at benefits only, banks often don’t account for the things that they just have to go and do.  If you spoke to most bank CTO’s they would readily admit that their organisations have underinvested in infrastructure.  You know why? It is difficult to define the benefits for it.  Why do most banks avoid social media instead of embracing it? It’s purely down to benefits.  Why does the UK lag against its global competitors in Mobile banking? That old chestnut benefits again.  Imagine if banks could think of profit growth as an expected outcome of quality customer service…

The current bank benefits culture also creates overhead.  Staff can spend countless hours debating, deriving and in some cases purely making up benefits to reach an accepted figure.  More so, benefits are often defined over five years.  If you have ever seen something not worth the paper it is written on, it is a five year business case in today’s day and age.  The world moves on after five months let alone five years.  If this doesn’t evidence the pure showmanship of the spectacle nothing does. I have never seen a team have ‘track year 5 benefits for project x’ on their to-do list. If anything, probably the worst aspect of the benefits culture is the fact that after going through the charade of defining them, no one actually tracks them.

The benefits culture creates an attitude not conducive to progress.  In the same way that the UK Government is reviewing its benefits strategy with the UK public, banks need to review the benefits processes they have adopted.  The bad habits have to end if the industry is to move forward.  If you think something is right, then go ahead and do it.  If it isn’t, then don’t.  Use benefits linked to your objectives to help align your propositions, but never, ever, let arbitrary benefit figures be your sole justification for proceeding with a change.  Once banks change this approach, they must just start to see the benefit of their new ways.


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