In today’s digital business environment, banks are increasingly adopting business transformation in order to stay competitive. However, enabling cost reduction, increased efficiency, and enhanced revenues are no longer the primary goal of the transformation initiatives. The initiatives are increasingly focused on realizing value at the enterprise level through the realization of strategic business outcomes. Implementing a business metric-based framework enables banks to measure the effectiveness of their operational transformation initiatives with respect to their business objectives.
This paper discusses the need for a metrics-based approach to measure operational transformation initiatives in the banking industry. It also outlines a method to identify desired business outcomes and build an effective business metrics framework based on the CAMEL rating system. The proposed approach pairs the process of measuring the impact of transformation initiatives with the bank’s strategic goals, resulting in enhanced effectiveness and relevance.