Strategy Management Challenges in Financial Services Industry

As analysts are predicting that gravy train for Financial Services industry is now gone, and financial institutes will find 2015 very challenging. The start of 2015 has already impacted world economy and plunging crude prices creating nightmares for policy makers.

Economic disruption, uncertainty in the investment sector and plummeting GDP growth pose many challenges that require conservative strategic approach. Warning signs are everywhere for the banks, financial institutions regarding low returns, credit losses and negative growth in some sectors. What does this mean for bank stakeholders and policy makers?  And what actions can reduce the negative impact of these uncontrollable external factors?

Here are few suggestions; 

• Be realistic in strategy formulation and consideration of all uncontrollable factors
• Secure resource management and tight budgeting for business processes
•  Listen closely to the company results and signs of trouble
• Implement scorecard and introduce high reporting culture
• Use Balanced Scorecard techniques for the financial perspective and other non-financial business contributors
• Plan for sustainability first and then explores growth opportunities
• Use strategy Maps from using balanced scorecard approach which will provide you a systematic framework to implement and execute strategy to deal with these challenges

Good practices for strategy implementation

• Engage employees as much as possible for the implementation phase and ensure they understand the strategy and challenges of the financial industry
• Define expectations and set target results
• Keep your employees motivate and optimistic for the future and don’t let bad news get their moral down  
• Use balanced scorecards techniques to develop reports, data and action plans for internal business processes
• Review and refine as much as possible during and after implementation phase

Here is an excellent blog about balanced scorecard approach http://www.thebalancedscorecards.com/. It explains in details about the strategy management and planning using a balanced scorecard as strategy management tool.

I am convinced that world banks are optimistic and focused in developing a coherent and collective strategy to deal with the financial industry challenges.