Thomas Olsen: Banking Strategy for the Long Game

The nature of banking is changing quickly, and disruptions are inevitable. Thomas Olsen, who leads Bain’s Strategy practice in the Asia-Pacific region, shares why banks need to take a long-term view.

Read the Bain Brief: Banking Strategy for the Long Game

Read the transcript below.

THOMAS OLSEN: Ironically, short term focus is actually slowing banks down. Disruption is now the consensus, and banks are busy launching near-term innovation initiatives to address that. And while most of these initiatives are worthwhile experiments and good motivation internally, they're not addressing the core long-term problem. Banking and the nature of the disruption they face is long term. Macro trends are going to have large implications on banks over time. And it's not just technology and competition, it's capital superabundance, demographic changes, unbundling the value chains of their clients.

Few banks are focusing enough on the long-term view and the long-term choices and actions required now to move in that direction. Banks need to deliver near-term results and progress, but they need a better balance across short-, medium- and long-term choices. The no-regret moves that they can make fast progress on today, the options and hedges that they can start placing for the medium term, and the big bets based on a view of the future that require time, like addressing the IT stack. Disruption is urgent, but it's not a short-term problem for banks. They need a long-term view.

Read the Bain Brief: Banking Strategy for the Long Game