Planning to Forecasting – Improvements in Banking

Planning to Forecasting – Improvements in Banking


Few industries have had to work through the level of competition and turmoil that banking has experienced in recent years. Volatile markets, government intervention and changing customer habits have created a truly dynamic environment. As this environment transforms, executives need to formulate and implement strategic or operational changes quickly to meet the market’s demands, while simultaneously updating forecasts. Inaccurate planning assumptions can lead to misplaced spending and misguided goals for the organization’s employees. Successful banks are those that can monitor the pulse of their business closely and adjust forecasts and operations simultaneously to meet their customers’ needs profitably.


Many financial services organizations currently rely on a static annual budgeting process to generate a plan that is the basis for the subsequent year’s business. This plan is based primarily on institutional knowledge rather than on the economic reality of the future time period. In today’s complex and rapidly changing environment, an annual budget cycle will leave the company focused on outdated goals, potentially leading to unprofitable operations. Worse yet, management may communicate one set of strategic imperatives while budgets and incentive compensation push for a different set of actions.

Challenges and Opportunities

Executives must evaluate and prioritize market opportunities, modify plans in response to changes in a volatile environment and empower the right people to make decisions day in and day out. In addition, essential activities such as risk management, performance monitoring, data analysis and reporting are needed to understand the current market, the organization’s performance and product-pricing pressures in order to adapt to changing conditions. Finally, this information and these capabilities will form the basis for understanding future operating trends. The question many financial services executives face is: How do we implement strategic adjustments quickly while keeping operations, metrics and financial targets synchronized?

Our Point of View

Strategic planning and budgeting should be integrated tightly in any industry, but in one as dynamic as banking, the synchronization of strategy and budgeting is absolutely imperative. However, banking organizations must move to a more dynamic model for forecasting future periods. Delivering real insight is dependent, to a large extent, on the ability to integrate business planning, forecasting and monitoring into a cohesive framework. It is particularly useful in dynamic environments such as the financial services industry, with its variable indirect cost structure, aggressive competition, diverse portfolio of products and savvy customer base.

An investment in an integrated planning solution can generate a positive ROI in several ways. Well-designed solutions can generate significant efficiency gains by eliminating bottlenecks, shortening processing time or relieving other process problems. Additionally, the increased efficiency of the process gives the finance function more opportunities to evaluate the accuracy of budget assumptions and move to a monthly or quarterly forecasting process. A more frequent forecasting process, as opposed to an annual budget, can translate into a much stronger connection between strategy and finance, and can provide management the capability to instill confidence with internal and external stakeholders.


How We Help Companies Succeed

Protiviti’s Performance and Information Management practice, working with the seasoned professionals in our Financial Services Industry team, offers a unique and proven combination of experience, methodologies and tools to deliver high-value results for an organization’s planning, performance management and reporting activities. We can assist in the alignment of strategy with operational and financial performance reporting and metrics. We also can help design and implement capabilities that will enable management to better understand and forecast business results based on multiple levels and views of the organization’s key data.


A regional financial institution was utilizing a static annual budgeting system and process, spending months to create an annual budget that was tied to its corporate strategy and compensation incentives. With the recent market conditions and increased volatility in planning assumptions, this company spent more than six months developing its budget, which was off-target and irrelevant after the first quarter.

Protiviti was engaged to develop a more efficient and manageable planning process, and then design and implement a solution that provided management with the ability to modify plans as needed.
State-of-the-art planning software was implemented to replace the legacy application. This gave the client an integrated planning, forecasting and reporting system with improved efficiency, accelerated processing and reporting for a faster budget cycle close, along with the controls needed to deliver trusted information. With the adoption of this integrated planning platform, our client’s executives can now distribute the planning workload to enable business users to own and maintain their component of the organization, leveraging their expertise in particular areas and eliminating a bottleneck in the planning process.

Finally, we developed a new streamlined forecasting process. Our client now has the ability to generate a monthly forecast and to reforecast as needed when market conditions change. This gives management the ability to be more agile in a volatile market and enables it to quickly implement strategic changes to stay ahead of the competition.


Paul Calamita
[email protected]
Jay Thompson
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Carl Waller
[email protected]

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