How Ready are Swiss Banks to Become Organisations of the Future?

This article is the fifth and last in a series of five under the main title “How Ready Are Swiss Banks to Become Organisations of the Future?”. In this chapter, we answer questions relating to organisational structures, agile ways of working, and dynamic capability management.

As organisational agility has become a central concept in the industry. It has taken on many nuanced meanings across organisations. But for those who take it seriously, the core remains constant: a way of adapting to be close to clients’ needs and meet the challenges of today's marketplace. This includes everything from ways of working, organisational structures, and procedures, like budgeting and decision-making to closer integration of IT and IT-adjacent capabilities into operative and strategic processes.

The goal is to create an organisation capable of successfully navigating and thriving in the current environment of tech-driven disruption, increased market complexity, a highly demanding clientele, and an intensifying competition for talent.

The objective of our study is to determine the status of this concept in the Swiss banking industry. How far along are individual banks and the sector in adopting the foundational aspects of organisational agility? Lastly, what are the factors that set a bank on that path to industry leadership in this space?

We set out to answer these questions through the lenses of organisational structures, agile ways of working, and dynamic capability management.

Main findings

Organisational structures:
  • In the current Swiss market, we encountered two basic organisational paradigms, which we call the partner and the traditional models.
  • The partner model is characterised by organisational and often physical proximity between IT and business. IT is involved early and throughout both the routine and innovation processes. The hierarchies are flat, and decision-making, as well as budgeting, are often devolved to a lower level. 
  • We have observed that the traditional model more often goes in hand with more strict hierarchies and top-down decision-making. The model still finds its adherents and does have its strengths, especially when measured against the downsides of opening up the organisation in a way the workforce is not ready for. 
  • In the study, we found that most banks follow the traditional model, or fall somewhere between the traditional and partner models. There is a lot of potential for progress in this space.
Agile ways of working:
  • Agile ways of working can result in higher customer focus, better time-to-market, enhanced product quality, more empowerment, and increased transparency – ultimately leading to higher satisfaction for both clients and employees.
  • Overall, Swiss banks are not yet very far along the path of agile ways of working. 
  • Many banks, having heard of this concept and having included it in the main strategic slide pack, perhaps initiate a pilot project, whereby a test unit adopts the new ways while everyone around keeps the old ways. 
  • In our study, we have come to see visible management commitment as a key issue. Even if the progress is slow, such commitment sends a clear signal that the organisation is on a determined path and will not waver – a necessary condition for sustainable change.
Dynamic capability management:
  • Technological disruption is here, real, and relentless. Banks that are not sufficiently capable in this space will fall behind and set themselves up to be disrupted from the outside – a process that may be sudden or may take the form of a slow glide into irrelevance and eventual failure.
  • The way to remain abreast of – and to help shape – these trends is to acquire, manage, and develop the relevant capabilities, which include robotics, AI, API development, excellence in user experience, and agile coaching.
  • This is where the war for talent is at its most ferocious, and banks find themselves competing not only within the industry but also across all tech-heavy sectors.


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The matrix

Overall, our observations have allowed us to categorise Swiss banks within the following matrix, defined by the axes of delivery power and organisational development. The data show a clear correlation between banks’ self-reported delivery power and the current organisational development stage, and hence indicate the importance of the organisational setup for achieving success.

The majority of the investigated banks are somewhere at the border between traditionalists and future leaders. Whilst most of them have started to implement initiatives, which will put them in a more advanced organisational development stage, there is still a huge potential for Swiss banks.

Moving to the “future leaders” area means staying relevant and attractive for current and future employees, being more flexible and agile, and hence allowing the organisation to be closer to market developments and to their clients.

On the other dimension – delivery power – most banks consider certain departments of the bank as efficient and effective, but as an entire organisation, there is still a lot of room for improvement to increase the delivery power even more.

How Ready are Swiss Banks to Become Organisations of the Future? 2
Figure 1. Organisational agility matrix

What makes a future leader? The study shows that organisational flexibility, talent acquisition and retention, determined capability management, and commitment by leadership are all decisive factors. Through our work, we have been able to define the best practices that can set a bank up for future leadership and help avoid pitfalls and roadblocks, such as the lure of tradition or the perils of halfhearted engagement.

We would like to share our best practices with you and help you on your way to becoming a future leader. Contact us and benefit from our expertise and years of experience.

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