Prioritising a Fourteen-Initiative Portfolio at a Regional Bank
Meridian Regional Bank serves 2.1 million retail customers across four countries. Its cost-income ratio is 68%, return on equity has fallen for six quarters, and the board has approved a three-year transformation with a €90 million envelope. Fourteen initiatives compete for funding: core banking replacement, mobile app rebuild, mortgage automation, data warehouse, open banking APIs, and ten smaller projects. The core platform replacement is estimated at 30 months and €45 million; the board wants a 20% cost reduction within 18 months. Regulators require data residency in two countries and prior notification for material cloud outsourcing. Each business unit has its own roadmap, there is no enterprise architecture function, and benefits are claimed but not tracked. The new transformation director must present a prioritised portfolio and governance model at the next board meeting.
1. Formulate a transformation vision and scope that reconcile the board's 18-month cost target with the 30-month core replacement.
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The vision should be outcome-based: a lower-cost, faster-to-serve retail bank that meets regulatory obligations and improves customer retention. The scope must distinguish between cost reduction that can be delivered before core replacement and structural cost reduction that depends on it. The 20% target in 18 months is credible only if it combines non-core levers such as mortgage automation, channel migration, and process simplification with a staged core programme. The core replacement should be scoped as a sequence of domain migrations, not a single 30-month cutover, so benefits begin earlier. The transformation director should present an explicit trade-off: either the bank accepts a lower near-term cost target, or it funds parallel change while managing core risk. The vision should also state what is out of scope, such as non-retail lines, to prevent the portfolio expanding again. This framing gives the board a decision rather than a schedule conflict.
2. Define prioritisation criteria and use them to recommend a first-wave portfolio from the fourteen initiatives.
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Prioritisation should use weighted criteria: strategic contribution to cost-income and customer outcomes, regulatory necessity, dependency on the core platform, risk reduction, time to measurable benefit, and delivery capability. A simple scoring model should be transparent and challengeable. First wave should include mortgage automation because it delivers cost reduction within 18 months and does not depend on core replacement; data warehouse and data governance because every later initiative depends on trusted data; and the core replacement discovery and first domain migration because delaying it makes the cost target unachievable. The mobile rebuild should be conditional on a customer journey business case and should not proceed in parallel with an unproven core migration unless capacity is ring-fenced. Open banking APIs should be sequenced by regulatory deadline. The ten smaller projects should be screened for duplication and stopped or merged. The recommendation should show funding by wave, not a flat list, and reserve contingency for regulatory data residency work.
3. Design a governance and funding model that gives the board confidence and prevents business units from bypassing priorities.
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Governance should separate three decisions: what enters the portfolio, how it is delivered, and whether benefits are realised. A transformation steering committee chaired by the CEO or CFO should own the portfolio and apply the agreed criteria; an enterprise architecture function should own standards and dependencies; and a benefits office should track committed outcomes against baselines. Funding should move from annual business-unit budgets to stage-gated waves: discovery funding is small and fast, scale funding requires a validated business case with a named benefit owner. Business units should retain run-the-bank budgets but cannot fund change initiatives outside the portfolio without steering committee approval. Regulatory notification for cloud outsourcing should be a mandatory gate, with legal and compliance represented. To prevent the old fourteen-roadmap problem, publish a single portfolio view, a dependency map, and a stop list. The board should receive a one-page scorecard quarterly showing spend, delivery confidence, and realised benefits, so governance is evidenced rather than asserted.