Transforming Financial Services Through Technology Business Management

Institutions face mounting pressure to innovate while reducing costs in today's evolving financial landscape. Technology Business Management (TBM) has emerged as a robust framework that enables organisations to align technology investments with business objectives, creating transparency and driving strategic decision-making.

What is technology business management?

Technology Business Management is a value-management framework instituted by CIOs, CTOs, CFOs and other technology leaders. Founded on transparency of costs, consumption, and performance, TBM gives technology leaders and their business partners the facts they need to collaborate on business-aligned decisions. This framework provides a standard taxonomy to describe cost sources, technologies, IT resources, and solutions, enabling organisations to compare their technology investments with peers and third-party options.

The Strategic Value of TBM for Financial Institutions

Financial services organisations have embraced TBM to transform their operations in several key ways:

Cost Optimisation and Efficiency

One of the most compelling use cases for TBM in financial institutions is cost optimisation. A leading UK-based banking and financial services company implemented TBM and achieved remarkable results, removing 20% from their IT annual budget while improving service delivery. This wasn't merely about cutting costs but strategically reallocating resources to drive innovation.

Many organisations have experienced substantial ROI on TBM implementation. Financial institutions have developed the capability to turn around business cases and programmes with cost implications in hours rather than weeks, accelerating time to market for innovations. This speed is crucial in the competitive financial services landscape, where being first to market can provide significant advantages.

Application Rationalisation

Application portfolios in financial institutions often grow unwieldy over time, creating unnecessary complexity and cost. TBM provides a framework for effective application rationalisation, considering all related costs across the entire technology stack.

When executed adequately through a TBM office, application rationalisation programmes have demonstrated the ability to increase cost savings by two to three times compared to initial estimates1. The key differentiator is that TBM enables organisations to maximise efficiency without negatively impacting their ability to service customers, grow revenue, improve operations, and achieve the required cost savings.

Business Restructuring and Strategic Decision-Making

Financial institutions undergoing restructuring have found TBM invaluable for providing deep insights into operations. By following the money and understanding how technology enables business operations, organisations can make more informed decisions about divestments, acquisitions, and operational changes.

With TBM in widespread use, financial institutions can show a much larger return on investment. Whether it's business restructuring, insurance operations, or other lines of business, TBM enables accurate assessment of stranded costs or other costs that can be eliminated from the company. This has helped many organisations become smaller but more efficient simultaneously.

Cloud Migration and FinOps

As financial institutions accelerate their cloud journeys, TBM and Cloud FinOps practices have become essential. A global financial services firm introduced TBM at the beginning of 2020 and saw exponential growth in billing data—from approximately 1 million rows of billing data each month to nearly 17 million rows—without increasing the size of their billing team.

TBM enables financial institutions to allocate direct and shared cloud services to users across the organisation. This provides the transparency needed to optimise cloud investments and manage costs effectively as cloud usage scales.

Implementing TBM: Best Practices for Financial Services

Building a Centre of Excellence

Successful TBM implementations in financial institutions often involve establishing a dedicated TBM office as a centre of excellence. This team becomes the "go-to" source for strategic business questions ranging from transfer pricing to trading floor activities and application simplification.

By training experts within each business unit to use TBM principles and tools, organisations can create a scalable model that allows the central TBM office to focus on strategic initiatives. At the same time, distributed teams address tactical issues like cost takeout.

Crowd-Sourced Problem Solving

TBM has enabled financial institutions to democratise problem-solving by putting data into the hands of teams who can act on it. With hundreds of decision-makers accessing TBM reporting, organisations can effectively "crowdsource" solutions to complex problems.

This approach has proven particularly effective for large-scale initiatives. When thousands work collectively on problems like server consolidation or application rationalisation, the impact scales dramatically compared to centralised efforts.

Aligning with Business Objectives

The most successful TBM implementations in financial services align closely with broader business objectives. For example, if a bank's corporate and institutional banking target is to achieve an efficiency ratio below 50%, TBM can be involved in 90% of the programmes delivering against that goal.

This alignment ensures that technology investments directly support business priorities, whether improving customer experience, accelerating digital transformation, or enhancing operational efficiency.

The Evolution of TBM in Financial Services

The journey of TBM in financial institutions has evolved significantly. Early implementations focused on tactical questions like "Why is that cost attributable to us?" or "How are we consuming technology?" Over time, this has transformed into a much more strategic outlook, with questions like "How can we restructure our business?" or "What would the impact be if we did this?"

As TBM offices mature, they transition from being questioned about their numbers to being seen as trusted sources of insight that support strategic imperatives and enable business innovation and service.

Conclusion

TBM offers a robust framework for aligning technology investments with business objectives for financial institutions, law firms, and other professional services organisations. By providing transparency into costs, consumption, and performance, TBM enables data-driven decision-making that can transform operations, reduce costs, and accelerate innovation.

The most successful organisations have integrated TBM throughout their business operations' lifecycle, from strategic planning and ideation to demand management, financial planning, delivery management, and value management. This comprehensive approach ensures that technology investments deliver maximum value to the business and its customers.

As technology continues to evolve and financial institutions face increasing pressure to innovate while controlling costs, TBM will remain an essential tool for technology leaders seeking to demonstrate the value of their investments and align them with business priorities.