The banking system that we have today can be traced back to the Middle Ages. The Medici family in Florence, Italy, created the formal structure of the bank, 750 years ago. Even today we retain the same structure in banks although technology has been used to automate business processes. With the rapid adoption of digital, today’s consumers have a plethora of choices for their banking needs and are no longer limited to their “local branches” for their banking needs. The traditional banks today have competition from unlikely sources: for example, M-pesa, the highly successive mobile wallet used across Africa is from Vodafone, a leading Telephone company. In China and APAC mobile platforms like Wechat have upwards of a billion users and provide the ability to conduct financial transactions within their platforms. Technology giants like Google, Apple and Amazon have launched mobile wallets that have captured billions of young users. Ant Financial, the financial arm of Alibaba in China has already vaulted into Top 10 financial companies in the world.
The core functions of a bank can be summarized into just 3 functions:
- Store Money safely (Includes investments)
- Transfer Money safely
- Loan Money when you need affordably
Ant Financial allows it’s 1.2 billion users to pay immediately, borrow money in just three minutes or make investments in the world’s largest monetary fund. Even within the banking community a new breed of banks, “Digital First” banks that exist only in your mobile with no physical branches are redefining banking from first principles. Cryptocurrencies are emerging with sky high ambitions to side-step the traditional banking system providing all the 3 above functions. The Fintech revolution is truly happening at this moment.
Traditional banks need to reinvent themselves by designing their operations from the customer’s perspective. OKRs is a great tool used by silicon valley to execute their strategy through rapid iterations. Banks need to embrace OKRs to aim for stretch targets, execute with focus, align the entire organization towards their overarching goals enabling their employees with the required tools.
Banks that consistently outperform the market take a customer-first approach to deliver an amazing experience for their customers. Banks can use this framework to measure the success of their ambitious goals and drive the company forward in areas such as client services, customer satisfaction, operations, and much more.
Let’s take a look at these examples of great OKRs for banks:
Example 1
An effective objective like improving branch performance would help you to attain key results that would enhance the overall functioning of the bank.
Objective: Improve Branch Performance
KR 1 : Maintain average transactions processed per teller hour work at 10
KR 2 : Maintain average retail branch lobby wait time at no more than 5 minutes
KR 3 : Decrease cost per teller transaction from $ 4 per transaction to $ 1 per transaction
Objective
Improve Branch Performance
Target Date: Annual-2021
Visibility: All Employees
Key Results
Maintain average transactions processed per teller hour work at 10
Average transactions processed per teller hourMaintain average retail branch lobby wait time at no more than 5 minutes
Average retail branch lobby wait timeDecrease cost per teller transaction from $ 4 per transaction to $ 1 per transaction
Cost per teller transactionExample 2
Try framing customer oriented objectives that would increase the number of footfalls in a limited period of time.
Objective: Improve Retail Customer Experience
KR 1 : Increase the number of smiley terminals in every branch from 1 to 3
KR 2 : Launch a training program for the employees on new tools and technology
KR 3 : Increase CSAT scores for retail banking customers from 60% to 90%
Objective
Improve Retail Customer Experience
Target Date: Q1-2021
Visibility: All Employees
Key Results
Increase the number of smiley terminals in every branch from 1 to 3
# of smiley terminalsLaunch a training program for the employees on new tools and technology
Launch training programIncrease CSAT scores for retail banking customers from 60% to 90%
CSAT scoreExample 3
Objective that helps you to focus on the customer experience with tellers will yield personalized satisfaction among customers.
Objective: Improve customer experience with tellers
KR 1 : Decrease the refresh period of advanced customer display units with recent products at the teller counter from 4 to 2 weeks
KR 2 : Increase cross-selling transactions to customers from 8% to 15% by providing personalized recommendations
KR 3 : Reduce Teller transaction cycle time from 5 minutes to 3 minutes
Objective
Improve customer experience with tellers
Target Date: Q1-2021
Visibility: All Employees
Key Results
Decrease the refresh period of advanced customer display units with recent products at the teller counter from 4 to 2 weeks
Recent product updates refresh periodIncrease cross-selling transactions to customers from 8% to 15% by providing personalized recommendations
Cross-selling transactionsReduce Teller transaction cycle time from 5 minutes to 3 minutes
Teller transaction cycle timeExample 4
Reducing and stopping fraudulent in banking will help you to save your reputation from getting vandalized.
Objective: Reduce Losses Due to Fraud
KR 1 : Decrease the number of false positives with the hybrid approach from 5% to 1%
KR 2 : Complete functionality test of internal controls to detect fraudulent behaviour
KR 3 : Implement an automated fraud detection system based on data analytics
Objective
Reduce Losses Due to Fraud
Target Date: Q1-2021
Visibility: All Employees
Key Results
Decrease the number of false positives with the hybrid approach from 5% to 1%
# of false positivesComplete functionality test of internal controls to detect fraudulent behaviour
Functionality testImplement an automated fraud detection system based on data analytics
Data analyticsExample 5
Improving trade operations will enhance employee performance and operations.
Objective: Improve Trade Operations
KR 1 : Decrease commercial bank statement error rate from 2% to 0.01%
KR 2 : Increase the no of employee training sessions on distributed ledger technology from 2 to 5
KR 3 : Complete digital capture of manually processed invoices over the past 2 years
Objective
Improve Trade Operations
Target Date: Annual-2021
Visibility: All Employees
Key Results
Decrease commercial bank statement error rate from 2% to 0.01%
Rate of statement errorsIncrease the no of employee training sessions on distributed ledger technology from 2 to 5
# of Employee training sessionsComplete digital capture of manually processed invoices over the past 2 years
Digital capture of manually processed invoicesExample 6
Frame OKRs in such a way that there is progress in your real transaction processing system, this would control and maintain the digital banking needs of the customers.
Objective: Improve real transaction processing system(TPS)
KR 1 : Decrease cycle time of ATM deposits from 60 seconds to 30 seconds
KR 2 : Increase the number of online transaction per min from 250 to 500
KR 3 : Hold 5 informational sessions on trade operations and support
Objective
Improve real transaction processing system(TPS)
Target Date: Annual-2021
Visibility: All Employees
Key Results
Decrease cycle time of ATM deposits from 60 seconds to 30 seconds
Cycle time of ATM depositsIncrease the number of online transaction per min from 250 to 500
# of online transactionsHold 5 informational sessions on trade operations and support
# of informational sessionsExample 7
Enlarge the relationship circle with SMB clients and nullify banking errors to earn customer loyalty.
Objective: Improve relationship with SMB clients
KR 1 : Decrease commercial bank error statement rate from 1% to 0.02%
KR 2 : Increase the SMB-specific customer satisfaction score from 5 to 8
KR 3 : Send at least one email a week about new offers and services to SMB customers
Objective
Improve relationship with SMB clients
Target Date: Q1-2021
Visibility: All Employees
Key Results
Decrease commercial bank error statement rate from 1% to 0.02%
# of Error statementsIncrease the SMB-specific customer satisfaction score from 5 to 8
SMB-specific customer satisfaction scoreSend at least one email a week about new offers and services to SMB customers
email/week on servicesExample 8
Expanding consumer lending operations would restrict users from facing fraudulence by enhancing user experience and the overall operations.
Objective: Improve Consumer Lending
KR 1 : Create SMS/ email alerts for all the identified top 3 abnormal activity of the borrowers
KR 2 : Decrease maximum waiting time for customers on call from 3 minutes to 1 minute to speak with a customer service representative
KR 3 : Increase # of loans approved through the fast track approval process from 150 to 200 in current quarter
Objective
Improve Consumer Lending
Target Date: Annual-2021
Visibility: All Employees
Key Results
Create SMS/ email alerts for all the identified top 3 abnormal activity of the borrowers
SMS/email alertsDecrease maximum waiting time for customers on call from 3 minutes to 1 minute to speak with a customer service representative
Waiting timeIncrease # of loans approved through the fast track approval process from 150 to 200 in current quarter
# of loans approvedExample 9
Maximum usage of credit cards can be achieved by controlling and decreasing the target interest rate with well-defined strategic key results.
Objective: Increase customer adoption of credit cards
KR 1 : Increase average transaction volume/month per credit card by 10%
KR 2 : Decrease credit card account attrition from 10 % to 8% in current quarter
KR 3 : Complete launch of payment deadline alert system for credit cards
Objective
Increase customer adoption of credit cards
Target Date: Q1-2021
Visibility: All Employees
Key Results
Increase average transaction volume/month per credit card by 10%
Average # of transactions per credit cardDecrease credit card account attrition from 10 % to 8% in current quarter
Rate of credit card attritionComplete launch of payment deadline alert system for credit cards
Payment deadline alert system for credit cardsExample 10
Well equipped team of financial advisory and investment services will yield multifold revenue that benefits investors as well as the bank.
Objective: Improve Financial Advising and Investment Services
KR 1 : Increase new private banking accounts opened per private wealth management employee by 15%
KR 2 : Increase interested investors from 25 to 45.
KR 3 : Improve integration of banks with developers of IoT devices and payment systems
Objective
Improve Financial Advising and Investment Services
Target Date: Q1-2021
Visibility: All Employees
Key Results
Increase new private banking accounts opened per private wealth management employee by 15%
# of Accounts opened per employeeIncrease interested investors from 25 to 45.
# of investorsImprove integration of banks with developers of IoT devices and payment systems
Integration of banks with developers of IoT devicesConclusion
OKRs can help you drive progress in your bank through any number of initiatives. Your strategy for better engaging customers, boosting performance, or improving operations can be executed using this framework.
When using OKRs, you need an agile software that helps you increase visibility throughout your company, improves collaboration and organization, and keeps all team members focused on your important goals. Profit.co offers intuitive features that can help you manage OKRs with ease and roll out the framework that has helped so many companies achieve their goals within your organization.