Making the Case for Your Bank’s Next Automation Investment
Use measurable outcomes to justify technology investments
Across the globe, banks were less profitable in 2024 than in 2023. As institutions look toward an even more challenging set of macroeconomic conditions in the future, larger banks with greater diversification are likely to fare better. As a result, midsize banks face increasingly high cost pressures, making sustainable growth strategies more critical than ever.
Automation programs have proven their value in helping financial services leaders achieve the key results they’re looking for, including doing more with less, increasing productivity, and reducing costs, all while mitigating risk. When asked about the importance of automation to future organizational success, financial services leaders responded with an average of 8.48 on a scale from 1 to 10, highlighting the critical nature of automation across the industry landscape.
Despite automation’s perceived value, many mid-market banks are wary of making investments that don’t directly impact the customer experience in our current economic environment. For executives seeking to launch an automation initiative, justifying the investment is the first (and most important) step. Clearly articulating the ROI and building a robust value case will unlock resources and create the institutional momentum needed to drive transformation.
Where to Start
- Align on the problem. Before jumping into the technical solution, begin by defining the business problem. What are the key challenges being addressed? How will the solution align to broader business objectives? Clear answers to both questions will ensure a solid strategy. It will also avoid the potential risk of wasting time and money by automating processes that don’t meet the right operational needs or achieve the intended value.
- Connect the right people. Launching any automation solution will require thoughtful engagement from both business and IT partners. Business teams provide operational insights, while IT offers scalable solutions and sustainable maintenance models. Ignoring the need for cross-functional collaboration results in siloed solutions that fail to address broader organizational needs.
- Understand operational considerations. At the onset, it may be tempting to focus on the technical requirements at stake. But technology isn’t the only consideration. Mid-market banks often underestimate the operational effort required to prepare an organization for new automation programs. Many aren’t aware of the rigorous operating model changes needed until too late in the process to make substantial pivots. Understanding existing processes and the operational implications of new solutions will reduce churn and prevent IT teams from developing automation for flawed or inefficient workflows. An optimized operating model can significantly boost a program's return.
- Clarify the cost. After understanding the business problem, bringing together cross-functional partners, and clarifying operational considerations, it’s time to align on the right automation solution. While the costs are often higher than leaders expect, the investment will be justified by a solid value case that documents the solution’s ability to create efficiencies, reduce cost, mitigate risk, and optimize productivity.
Building the Value Case
A strong value case creates confidence for management that your automation solution is not only worth the investment from an ROI perspective, but also right-sized to achieve business objectives. The value case establishes success metrics upfront, enabling the program's performance to be measured and assessed against its defined targets. They also lay the foundation for a successful implementation in the long run, by clarifying how solutions will be operationalized and scaled across the business.
A value case is made up of 3 key components:
1. Current State Challenges
- What is the problem we’re trying to solve?
- How do these challenges impact cost, productivity, quality, and risk?
2. Proposed Solution
- What is the solution (including technology, process, and people elements)?
- What value will it create?
3. Investment & ROI
- What upfront investment is needed?
- How do we measure ROI?
- What’s the roadmap to impact?
Help leaders imagine what ROI could look like for your organization, including operational and financial gains in the short, medium, and long term. Initial discussions should highlight all the benefits that automation could help the business achieve. Projected cost savings, risk reduction, quality control opportunities, and efficiency gains are all important to call out.
Bottom-line value matters, but it’s also important to keep the conversation people centered. Frame the strategy in terms of the benefits to be experienced by members of the workforce and your customers.
To validate these projections, consider starting with a pilot program. A small-scale implementation allows teams to test the strategy, uncover challenges, and make necessary adjustments before broader deployment. From the outset, establish clear metrics to measure pilot outcomes and resource needs, ensuring that early savings and efficiencies are sustained over time.
As confidence in the solution grows and processes mature, begin planning for larger-scale implementation. This may include identifying external partners to support scaling efforts, ensuring the solution is successfully operationalized across the organization.
Midsize banks face increasingly high cost pressures, making sustainable growth strategies more critical than ever.
Building an Effective Value Case: Aligning Stakeholders for Success
Building alignment is a crucial factor in creating a persuasive and compelling value case. A value case is not just a document or spreadsheet showcasing ROI, but also a strategic communications tool, helping stakeholders understand why a particular path should be chosen.
Building a value case should be collaborative, involving key stakeholders from the beginning. The first step is understanding their perspectives—what do they want to see in the value case? Are they more concerned about delivering business value, getting a return on investment, or perhaps starting small with a proof of concept? Identifying key stakeholders and understanding their concerns and preferences is the key to a value case that is adopted by the whole organization.
An iterative approach is best - building a value case in isolation could lead to missed opportunities. Once the major pieces of the value case are identified, frequent check-ins with stakeholders ensure they feel valued, and their thoughts and concerns are addressed.
The final value case should serve as a balanced communication tool that accurately implements a cost-benefit analysis of the project. It should have the appropriate level of detail, purposed to gather feedback and foster alignment within the organization, smoothing potential implementation. Ultimately, if executed well, all stakeholders will clearly understand the value of the proposed investment.
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