strategic business plan of a bank

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How to Write a Business Plan to Start a Bank

FEB.10, 2024

Bank Business Plan Checklist

A bank business plan is a document that describes the bank’s goals, strategies, operations, and financial projections. It communicates the bank’s vision and value proposition to potential investors, regulators, and stakeholders. A SBA business plan should be clear, concise, and realistic. It should also cover all the essential aspects of the bank’s business model.

Here is a checklist of the main sections that you should keep in mind while building a bank business plan:

• Executive summary
• Company description
• Industry analysis
• Competitive analysis
• Service or product list
• Marketing and sales plan
• Operations plan
• Management team
• Funding request
• Financial plan

Sample Business Plan for Bank

The following is a bank business plan template that operates in the USA. This bank business plan example is regarding ABC Bank, and it includes the following sections:

Executive Summary

ABC Bank is a new bank for California’s SMBs and individuals. We offer convenient banking services tailored to our customers’ needs and preferences. We have a large target market with over 500,000 SMBs spending billions on banking services annually. We have the licenses and approvals to operate our bank and raised $20 million in seed funding. We are looking for another $30 million in debt financing.

Our goal is to launch our bank by the end of 2024 and achieve the following objectives in the first five years of operation:

• Acquire 100,000 customers and 10% market share
• Generate $100 million in annual revenue and $20 million in net profit
• Achieve a return on equity (ROE) of 15% and a return on assets (ROA) of 1.5%
• Expand our network to 10 branches and 50 ATMs
• Increase our brand awareness and customer loyalty

Our bank has great potential to succeed and grow in the banking industry. We invite you to read the rest of our microfinance business plan to learn about how to set up a business plan for the bank and how we will achieve our goals.

Industry Analysis

California has one of the biggest and most active banking industries in the US and the world. According to the Federal Deposit Insurance Corp , California has 128 financial institutions, with total assets exceeding $560 billion.

The California banking industry is regulated and supervised by various federal and state authorities. However, they also face several risks and challenges, such as:

• High competition and consolidation
• Increasing regulation and compliance
• Rising customer demand for digital and mobile banking
• Cyberattacks and data breaches
• Environmental and social issues

The banking industry in California is highly competitive and fragmented. According to the FDIC, the top 10 banks and thrifts in California by total deposits as of June 30, 2023, were:

Customer Analysis

We serve SMBs who need local, easy, and cheap banking. We divide our customers into four segments by size, industry, location, and needs: 

SMB Segment 1 – Tech SMBs in big cities of California. These are fast-growing, banking-intensive customers. They account for a fifth of our market share and a third of our revenue and are loyal and referable.

SMB Segment 2 – Entertainment SMBs in California’s entertainment hubs. These are high-profile, banking-heavy customers. They make up a sixth of our market and a fourth of our revenue and are loyal and influential.

SMB Segment 3 – Tourism SMBs in California’s tourist spots. These are seasonal, banking-dependent customers. They represent a quarter of our market and a fifth of our revenue and are loyal and satisfied.

SMB Segment 4 – Other SMBs in various regions of California. These are slow-growing, banking-light customers. They constitute two-fifths of our market and a quarter of our revenue and are loyal and stable.

Competitive Analysis

We compete with other banks and financial institutions that offer similar or substitute products and services to our target customers in our target market. We group our competitors into four categories based on their size and scope: 

1. National Banks

• Key Players – Bank of America, Wells Fargo, JPMorgan Chase, Citibank, U.S. Bank
• Strengths – Large customer base, strong brand, extensive branch/ATM network, innovation, robust operations, solid financial performance
• Weaknesses – High competition, regulatory costs, low customer satisfaction, high attrition
• Strategies – Maintain dominance through customer acquisition/retention, revenue growth, efficiency

2. Regional Banks

• Key Players – MUFG Union Bank, Bank of the West, First Republic Bank, Silicon Valley Bank, East West Bank
• Strengths – Loyal customer base, brand recognition, convenient branch/ATM network, flexible operations
• Weaknesses – Moderate competition, regulatory costs, customer attrition
• Strategies – Grow market presence through customer acquisition/retention, revenue optimization, efficiency

3. Community Banks

• Key Players – Mechanics Bank, Bank of Marin, Pacific Premier Bank, Tri Counties Bank, Luther Burbank Savings
• Strengths – Small loyal customer base, reputation, convenient branches, ability to adapt
• Weaknesses – Low innovation and technology adoption
• Strategies – Maintain niche identity through customer loyalty, revenue optimization, efficiency

4. Online Banks

• Key Players – Ally Bank, Capital One 360, Discover Bank, Chime Bank, Varo Bank
• Strengths – Large growing customer base, strong brand, no branches, lean operations, high efficiency
• Weaknesses – High competition, regulatory costs, low customer satisfaction and trust, high attrition
• Strategies – Disrupt the industry by acquiring/retaining customers, optimizing revenue, improving efficiency

Market Research

Our market research shows that:

• California has a large, competitive, growing banking market with 128 banks and $560 billion in assets.
• Our target customers are the SMBs in California, which is 99.8% of the businesses and employ 7.2-7.4 million employees.
• Our main competitors are national and regional banks in California that offer similar banking products and services.

We conclude that:

• Based on the information provided in our loan officer business plan , there is a promising business opportunity for us to venture into and establish a presence in the banking market in California.
• We should focus on the SMBs in California, as they have various unmet banking needs, preferences, behavior, and a high potential for growth and profitability.

Operations Plan

Our operational structure and processes form the basis of our operations plan, and they are as follows:

• Location and Layout – We have a network of 10 branches and 50 ATMs across our target area in California. We strategically place our branches and ATMs in convenient and high-traffic locations.
• Equipment and Technology – We use modern equipment and technology to provide our products and services. We have c omputers and software for banking functions; security systems to protect branches and ATMs; communication systems to communicate with customers and staff; i nventory and supplies to operate branches and ATMs.
• Suppliers and Vendors – We work with reliable suppliers and vendors that provide our inventory and supplies like cash, cards, paper, etc. We have supplier management systems to evaluate performance.
• Staff and Management – Our branches have staff like branch managers, customer service representatives, tellers, and ATM technicians with suitable qualifications and experience.
• Policies and Procedures – We have policies for customer service, cash handling, card handling, and paper handling to ensure quality, minimize losses, and comply with regulations. We use various tools and systems to implement these policies.

Management Team

The following individuals make up our management team:

• Earl Yao, CEO and Founder – Earl is responsible for establishing and guiding the bank’s vision, mission, strategy, and overall operations. He brings with him over 20 years of banking experience.
• Paula Wells, CFO and Co-Founder – Paula oversees financial planning, reporting, analysis, compliance, and risk management.
• Mark Hans, CTO – Mark leads our technology strategy, infrastructure, innovation, and digital transformation.
• Emma Smith, CMO – Emma is responsible for designing and implementing our marketing strategy and campaigns.
• David O’kane, COO – David manages the daily operations and processes of the bank ensuring our products and services meet the highest standards of quality and efficiency.

Financial Projections

Our assumptions and drivers form the basis of our financial projections, which are as follows:

Assumptions: We have made the following assumptions for our collection agency business plan :

• Start with 10 branches, 50 ATMs in January 2024
• Grow branches and ATMs 10% annually
• 10,000 customers per branch, 2,000 per ATM
• 5% average loan rate, 2% average deposit rate
• 80% average loan-to-deposit ratio
• $10 average fee per customer monthly
• $100,000 average operating expense per branch monthly
• $10,000 average operating expense per ATM monthly
• 25% average tax rate

Our financial projections are as per our:

• Projected Income Statement
• Projected Cash Flow Statement
• Projected Balance Sheet
• Projected Financial Ratios and Indicators

Select the Legal Framework for Your Bank

Our legal structure and requirements form the basis of our legal framework, which are as follows:

Legal Structure and Entity – We have chosen to incorporate our bank as a limited liability company (LLC) under the laws of California.

Members – We have two members who own and control our bank: Earl Yao and Paula Wells, the founders and co-founders of our bank.

Manager – We have appointed Mark Hans as our manager who oversees our bank’s day-to-day operations and activities.

Name – We have registered our bank’s name as ABC Bank LLC with the California Secretary of State. We have also obtained a trademark registration for our name and logo.

Registered Agent – We have designated XYZ Registered Agent Services LLC as our registered agent authorized to receive and handle legal notices and documents on behalf of our bank.

Licenses and Approvals – We have obtained the necessary licenses and approvals to operate our bank in California, including:

• Federal Deposit Insurance Corporation (FDIC) Insurance
• Federal Reserve System Membership
• California Department of Financial Protection and Innovation (DFPI) License
• Business License
• Employer Identification Number (EIN)
• Zoning and Building Permits

Legal Documents and Agreements – We have prepared and signed the necessary legal documents and agreements to form and operate our bank, including:

• Certificate of Formation
• Operating Agreement
• Membership Agreement
• Loan Agreement
• Card Agreement
• Paper Agreement

Keys to Success

We analyze our market, customers, competitors, and industry to determine our keys to success. We have identified the following keys to success for our bank.

Customer Satisfaction

Customer satisfaction is vital for any business, especially a bank relying on loyalty and referrals. It is the degree customers are happy with our products, services, and interactions. It is influenced by:

• Product and service quality – High-quality products and services that meet customer needs and preferences
• Customer service quality – Friendly, professional, and helpful customer service across channels
• Customer experience quality – Convenient, reliable, and secure customer access and transactions

We will measure satisfaction with surveys, feedback, mystery shopping, and net promoter scores. Our goal is a net promoter score of at least 8.

Operational Efficiency

Efficiency is key in a regulated, competitive environment. It is using resources and processes effectively to achieve goals and objectives. It is influenced by:

• Resource optimization – Effective and efficient use and control of capital, staff, and technology
• Process improvement – Streamlined, standardized processes measured for performance
• Performance management – Managing financial, operational, customer, and stakeholder performance

We will measure efficiency with KPIs, metrics, dashboards, and operational efficiency ratios. Our goal is an operational efficiency ratio below 50%.

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Highly Efficient Service! I am incredibly happy with the outcome; Alex and his team are highly efficient professionals with a diverse bank of knowledge.

Are you looking to hire business plan writers to start a bank business plan? At OGSCapital, we can help you create a customized and high-quality bank development business plan to meet your goals and exceed your expectations.

We have a team of senior business plan experts with extensive experience and expertise in various industries and markets. We will conduct thorough market research, develop a unique value proposition, design a compelling financial model, and craft a persuasive pitch deck for your business plan. We will also offer you strategic advice, guidance, and access to a network of investors and other crucial contacts.

We are not just a business plan writing service. We are a partner and a mentor who will support you throughout your entrepreneurial journey. We will help you achieve your business goals with smart solutions and professional advice. Contact us today and let us help you turn your business idea into a reality.

Frequently Asked Questions

How do I start a small bank business?

To start a small bank business in the US, you need to raise enough capital, understand how to make a business plan for the bank, apply for a federal or state charter, register your bank for taxes, open a business bank account, set up accounting, get the necessary permits and licenses, get bank insurance, define your brand, create your website, and set up your phone system.

Are banks profitable businesses?

Yes, banks are profitable businesses in the US. They earn money through interest on loans and fees for other services. The commercial banking industry in the US has grown 5.6% per year on average between 2018 and 2023.

Download Bank Business Plan Sample in pdf

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Bank Business Plan Template

Written by Dave Lavinsky

Bank Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their banks.

If you’re unfamiliar with creating a bank business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a bank business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Bank Business Plan?

A business plan provides a snapshot of your bank as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Bank Business

If you’re looking to start a bank or grow your existing bank, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your bank to improve your chances of success. Your bank business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Banks

With regards to funding, the main sources of funding for a bank are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for banks.  

Finish Your Business Plan Today!

How to write a business plan for a bank.

If you want to start a bank or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your bank business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of bank you are running and the status. For example, are you a startup, do you have a bank that you would like to grow, or are you operating a chain of banks?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the bank industry.
• Discuss the type of bank you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of bank you are operating.

For example, you might specialize in one of the following types of banks:

• Commercial bank : this type of bank tends to concentrate on supporting businesses. Both large corporations and small businesses can turn to commercial banks if they need to open a checking or savings account, borrow money, obtain access to credit or transfer funds to companies in foreign markets.
• Credit union: this type of bank operates much like a traditional bank (issues loans, provides checking and savings accounts, etc.) but banks are for-profit whereas credit unions are not. Credit unions fall under the direction of their own members. They tend to serve people affiliated with a particular group, such as people living in the same area, low-income members of a community or armed service members. They also tend to charge lower fees and offer lower loan rates.
• Retail bank: retail banks can be traditional, brick-and-mortar brands that customers can access in-person, online, or through their mobile phones. They also offer general public financial products and services such as bank accounts, loans, credit cards, and insurance.
• Investment bank: this type of bank manages the trading of stocks, bonds, and other securities between companies and investors. They also advise individuals and corporations who need financial guidance, reorganize companies through mergers and acquisitions, manage investment portfolios or raise money for certain businesses and the federal government.

In addition to explaining the type of bank you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of clients with positive reviews, reaching X number of clients served, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the bank industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the bank industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your bank business plan:

• How big is the bank industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your bank? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your bank business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, small businesses, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of bank you operate. Clearly, corporations would respond to different marketing promotions than individuals, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other banks.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes trust accounts, investment companies, or the stock market. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of bank are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide loans and retirement savings accounts?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a bank business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of bank company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide savings accounts, auto loans, mortgage loans, or financial advice?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your bank. Document where your company is situated and mention how the site will impact your success. For example, is your bank located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your bank marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your bank, including reconciling accounts, customer service, accounting, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign up your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your bank to a new city.  

Management Team

To demonstrate your bank’s potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing banks. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a bank or successfully running a small financial advisory firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 5 clients per day, and/or offer sign up bonuses? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your bank, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a bank:

• Cost of furniture and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your bank location lease or a list of accounts and loans you plan to offer.  

Writing a business plan for your bank is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the bank industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful bank.  

Bank Business Plan Template FAQs

What is the easiest way to complete my bank business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your bank business plan.

How Do You Start a Bank Business?

Starting a bank business is easy with these 14 steps:

• Choose the Name for Your Bank Business
• Create Your Bank Business Plan
• Choose the Legal Structure for Your Bank Business
• Secure Startup Funding for Your Bank Business (If Needed)
• Secure a Location for Your Business
• Register Your Bank Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Bank Business
• Buy or Lease the Right Bank Business Equipment
• Develop Your Bank Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Bank Business
• Open for Business

Don’t you wish there was a faster, easier way to finish your Bank business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business plan consultant can create your business plan for you.

Other Helpful Business Plan Articles & Templates

The complete guide to banking business strategy in 2022

How to harness the power of technology advancements, exceed customer expectations, and deploy smarter strategies for growth at scale.

Table of contents

The need for digital

The difference between growth and scale

Recommit to customer obsession

Future-proof your offerings

How Blend can help

While it may be a challenging time to be operating in the financial services industry, opportunities for growing your business are in abundance.

The long-established products and services of old, delivered through physical distribution networks via traditional sales and marketing techniques, are no longer fit for purpose. However, you can find a way to level-up against digital-first providers and pioneering banks that are not held back by legacy systems or decades-old processes.

You also have new opportunities to become more customer-centric . Based on their interactions with companies in other sectors, today’s consumers expect you to offer around-the-clock availability, friction-free experiences, and personalized offerings. And they are no longer prepared to wait weeks or even months for an account to be opened, a loan to be granted, or a mortgage to be approved. Adapt to meet these expectations, and you can thrive.

Finally, global uncertainty is compounding fluctuations in historically cyclical financial patterns. But fostering resilience can help you grow. Learn to adapt against a backdrop of uncertainty. 

Whether optimizing for competition, customers, or consistency, digital strategies that scale are the foundation for success. Let’s explore why.

Compounding the need for digital

All of the above opportunities can be unlocked through digitalization, which promises greater convenience, improved customer experiences, reduced overhead, and faster time-to-market, among other benefits. And the pioneers are proving its worth: Accenture research has found that a small number of digital-focused banks (the top 12%) are benefiting from significant financial returns. In fact, the report goes on to find that digital-focused banks are achieving their success through higher operating leverage that squeezes more profitability out of every dollar of assets. 

The rest of the industry is certainly taking note. Sixty-seven percent of banks believe they will lose market share within just two years if they fail to transform themselves digitally. 

Unfortunately, many banks are failing to act on this realization. Research suggests that less than a third  of banks are currently implementing a digital strategy . 

It’s time for that to change. 

How can you use the growth/scale distinction to prioritize digital development strategies?

It can be easy to fall into the trap of confusing growth and scale, but there’s an important distinction to be made between the two. 

• Growth is revenue-focused and happens when resources grow at the same pace as revenue. 
• Scale is still about growing revenue but without an associated growth in cost. It’s about increased returns, greater stability, lower cost per customer acquisition, and improved efficiency and productivity.

If you're able to scale digitally, you can not only experience growth but also reduce wasted resources and cut costs.

With this in mind, scale is a key consideration when developing your digital strategy. Here are three scale-aligned areas to focus on:

1. Scale by recommitting to your customer obsession

Companies that lead in customer experience outperform those that don’t by nearly 80% . That’s because customers who enjoy positive experiences are likely to spend 140% more than customers who report negative experiences. 

Along with the fact that it costs up to 25 times more to win new business than it does to keep existing customers, this illustrates just how important the customer experience is to your ability to scale. By focusing on delivering exceptional experiences to your existing customers you can capture additional revenue while minimizing new expenditures. 

It’s time to better meet customer needs  

If you recommit to your customer obsession, you can deliver the service that consumers are crying out for . By creating seamless, hassle-free banking experiences for customers across all channels and all product lines, you can build customer relationships that last beyond a single interaction. 

But this doesn’t automatically mean making everything digital.

Customers want: 

• Flexibility They want a choice of channels, but also the ability to switch from one to another on their terms — and without disrupting or fragmenting their journey. 
• Convenience They get frustrated when applications take too long, and they are put off when they are asked to spend their valuable time sourcing paper-based documents to support their application, especially for “simple” products such as deposit accounts.
• Human support when things get difficult They want you to be there for them at the moments that matter, and they want to be understood. Fifty-one percent of consumers expect that banks will anticipate their needs and make relevant suggestions before they even make contact.

Putting it into practice The mortgage team at University of Wisconsin Credit Union (UWCU) has been able to establish a reputation among its members as a company at the forefront of innovation.

Members are using the technology provided to them at high rates and finding the features easy to navigate. In fact, 83% of applications that are started online are submitted.

Meanwhile, Blend’s consumer single sign-on and asset pre-fill is giving borrowers the “show me you know me” experience they were looking for. The UWCU member base quickly showed their enthusiasm for the new feature, with twice as many applicants utilizing data connectivity for assets as a result. 

2. Scale by future-proofing your offerings

Demand for your products is constantly fluctuating, which impacts the economics of selling it. While you may have a full suite of offerings available at any given moment, the amount of internal resources dedicated to any one depends mostly on its current profitability. When the perfect storm of low cost products being in high demand hits, it’s important that you are ready to pounce. 

Doing this successfully typically requires the physical reallocation of people as well as adjustments to process. However, a more scalable approach minimizes the need for what is essentially continuous reinvestment into products as demand changes. 

This requires a deep understanding of new market requirements and the agility to launch new products in a timely manner. To achieve this, m any financial institutions end up choosing one-off point solutions that may help them get a single product to market quickly, but can leave them with a siloed infrastructure that leads to inconsistent experiences. It’s the exact opposite of future-proofing your business. 

How can you secure your future success?

A better approach is implementing a solution that can support all lines of business.  

Having one system that supports all products helps ensure there is consistent access to them at all times.

What’s more, it simplifies the transitioning of resources, because each product is situated within the same system. It also minimizes the amount of human capital change required to do so. Ultimately, this will: 

• Enable your organization to consistently meet customer needs
• Help you succeed more effectively against the competition
• Ensure you have a diverse product portfolio that secures your future success

Putting it into practice 

Our partnership with Elements Financial is a great example of what can be achieved with a scalable technology investment. Four years ago, the company came to us to help them elevate their member experience for mortgage and home equity. We achieved great success, and so they asked us to expand our partnership with the addition of a portfolio of new products: the Consumer Banking Suite. 

It’s paid off. With Blend, the average member’s mortgage application-to-fund time decreased by five calendar days. Streamlined applications may be a contributing factor in the growth Elements has realized: approved applications for deposit accounts, vehicle loans, personal loans, and credit cards have increased by 11% on average.

What started as a tool to improve experience for mortgage and home equity is now enabling Elements to originate loans across products on the same platform. One investment has scaled alongside the team’s needs.

Learn how to apply a future-oriented strategy to a key lending product: home equity

3. Scale by fully embracing (the right) technology

The path to digital shouldn’t require you to rip and replace your technology on a regular basis, yet it’s a situation we see all too often. 

Cloud-based platforms offer an alternative. They can help you scale through integrations that connect the old with the new, delivering a consistent, unified experience. Automatic software updates remove the burden of stressful and inconvenient upgrade procedures, which can be a drain on lenders’ IT teams. Overheads are reduced too — lenders may no longer need to invest in their own server, networks, and other expensive infrastructure.

Perhaps most importantly, a good cloud solution provides cumulative value, not a one-off benefit that then tapers.

That’s partly because the technology scales with you — constant innovation on the bank side is matched by the same on the tech side. But it’s also because there’s a multiplicative effect of combining feature sets. I f you have a point solution that does one thing well, and then a separate one that does something else well, you likely aren’t benefiting from synergies across the two. However, when a single system has multiple features and/or products, the value is magnified.

What should you look for in your cloud solution? 

Two key features will help you get the most from your cloud solution:  

• Automation Despite what you may have heard, automation isn’t about replacing human workers. It’s about unlocking human potential. Good cloud solutions do this by removing manual and often repetitive processes and automating them conveniently and efficiently.
• Machine intelligence Software that uses machine learning, predictive analytics, and business intelligence is not only able to collect data, but also identify and analyze it. This enables features such as instant decisioning and verified pre-approval and can offer machine-powered recommendations that create a personalized feel for customers and help you close more loans.

New York-based M&T Bank joined forces with Blend to help it drive continuous improvement and to achieve the agility it needed to navigate times of change. When unprecedented demand for a unique product offering emerged, M&T leadership turned to Blend to scale their delivery.

“Partnering with Blend meant we could move quickly enough to be there for our customers when they needed it,” said Chris Kay, who leads M&T’s consumer and business banking divisions. “The team’s dedication to making this work on a short timeline is a testament to the type of partner Blend is, and the way your platform could adapt to this new situation and scale rapidly was especially impressive.”

Learn how to unlock digital agility with Blend

At Blend, we don’t consider ourselves a vendor. We are a partner. We believe in getting to know our financial services customers, in understanding their needs and challenges, and in working hand-in-hand to help them get the very best out of our software.

We are here to help you scale digitally by focusing on the three scale-aligned areas we’ve discussed above. 

We help you recommit to your customer obsession

Blend’s cloud-based platform has been built with elevated customer experiences in mind. It offers: 

• Digital applications that are easy to navigate: Blend’s conversational interface is designed to guide customers through the application process.
• Speedy applications Because Blend connects to external data sources, customers benefit from pre-filled fields and automatic data verification.
• Omnichannel support Blend allows your customers to start and stop the application process across devices, with human support available right at the moment that matters.

Blend also helps your lending teams to nurture customer relationships, building longevity and boosting long-term revenue at the same time. You can use the platform to create a consistent experience across all lines of business — signifying your commitment to your customers. 

We are building to a future where, when a customer chooses to open a deposit account for example, they are recommended natural next step products such as a credit card or a car loan — and they can apply for those products in the same environment. This will create a natural, consistent flow that mirrors consumers’ typical purchasing patterns.

Ultimately, we believe this will result in more loyal — and more valuable — customers. 

We help you future-proof your success

Thanks to  its expanded suite of out-of-the-box offerings  and configuration capabilities, Blend’s cloud-based platform supports any consumer banking product. 

Its comprehensive component library, pre-built templates, drag-and-drop workflow building, and integrated data services help product teams take ideas to market faster but in a consistent and structured way.

Ultimately, it gives the agility you need to provide the right product at the right time for your customers, supporting your position as the go-to advisor for every financial need.

In addition, we are consistently adding new modular features that help you put emphasis on the highest value-add experiences in alignment with market trends. For example, we recently released a standalone income product after hearing from customers that the fragmented offerings available were not meeting their needs. 

We help you embrace the right technology 

Blend’s cloud-native platform allows you to do business wherever you are. With automatic updates, you can be sure you always have the latest version of our software with the best functionality. 

And that’s not all. Using machine intelligence, our platform can: 

• Verify data automatically , and pre-fill fields on the application using data from the borrower.
• Aggregate data from tax offer platforms and payroll providers.
• Fix common sources of friction by analyzing applicant data and documents to flag and surface issues.

All this can improve the overall waiting and processing time, leading to happier customers and happier bankers too. And the right technology is only right for you if it is also committed to growing with you. Our customer-first approach puts you at the center of our roadmap.

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The Importance of Strategic Planning for Banks, Credit Unions, and Financial Institutions

RELATED TAGS:

financial institution , Strategic Planning , supply chain

Financial institutions worldwide help customers reach financial goals and understand responsibilities. They use various tools to meet customer needs and stay on track with corporate goals.

A financial institution’s strategic plan can help these organizations stay prepared for upcoming trends. These plans allow institutions to identify clear goals and create actionable plans to meet them. 

Read on to learn more about strategic planning for banks and other financial institutions. 

In This Article

What Is Strategic Planning?

Why is strategic planning important for financial institutions, why banks, credit unions, and financial institutions should implement a strategic plan, how to get started with strategic planning, achieveit strategic planning for banks, credit unions, and financial institutions.

Strategic planning is an ongoing process businesses use to identify goals and create actionable steps to achieve them . The activity helps employees and shareholders agree on desired outcomes that match the organization’s overall vision. You can also use strategic planning to analyze current industry trends and modify behaviors to meet new demands.

Many organizations create a written strategic plan to track their objectives. This document typically features components like:

• A mission statement that explains the plan’s overall context and purpose
• Clear timelines for implementing a strategy and reaching a goal
• Periodic benchmarks or objectives that show continual progress
• Explanation of leaders and other members with specific roles or tasks assigned

An effective strategy explains an organization’s current goals and acknowledges how these will lead to more success. Plans can help you prepare for alterations in demand, supply chain disruptions, or personnel changes.

Strategic planning can bring many benefits to businesses in any industry.

• Establishing a core vision:  A strategic plan requires you and your shareholders to identify a central concept for your organization. You can then use this shared outlook to unify all stakeholders and employees around a single purpose. By explaining your company’s goals and the reasoning behind them, you can provide an increased sense of responsibility. You can also use this insight to inform everyday tasks and behaviors and motivate employees to find more purpose in their work.
• Using a data-centric approach:  Strategic planning consists of analyzing decisions and backing them up with data. As you break down each of your current strategies, you can evaluate their effectiveness and decide whether to keep them or alter them. Because you have to justify all your methods, you remove any chances of implicit biases or other restraints that could hinder your progress. For example, you might incorrectly assume  the most obvious solution  is the best for your organization instead of considering more complex options.
• Tracking real-time progress:  Lastly, a strategic plan allows you to track quantifiable progress toward your goals. You can set benchmarks for crucial stages and divide these by departments, teams, or individuals. Then, you can monitor progress by how well these groups meet them. 

Overall, strategic planning is crucial because it allows organizations to identify and directly work toward objectives. Without knowing where you want to go or how you plan to get there, it becomes challenging for your company to move forward.

Financial institutions should strive to make thorough and actionable plans for future goals. Banks, credit unions, insurance services, and other financial organizations are responsible for providing customers with accurate data and informative suggestions. 

During the COVID-19 pandemic, the financial field has experienced  a surge in electronic payments  and other digital changes. As the industry continues to shift toward electronic formats, institutions must adapt existing practices to meet new demands. 

By creating a bank strategic plan, financial institutions can prepare to meet these and other challenges in the industry. Your plan can identify current goals and outline the steps you will take to achieve them. During this process, you can analyze existing strategies and find ways to enhance them.

A strategic plan can improve your financial institution’s ability to meet customer expectations. As you optimize your practices, you can establish your institution as a leader in your field.

If your financial institution is ready to create a strategic plan but isn’t sure where to start, here are some steps you can take.

• Assess current trends:  One of the best ways to start the process is by examining current trends in the financial industry. For instance, you can assess its growth levels, significant leaders or competitors in the field or what services are in demand. Identifying trends can help you alter your plans to meet these needs.
• Define your mission and values:  Next, identify your organization’s overall mission and values. You can use these to guide your plans and ensure your actions stay aligned with your purpose. Most mission statements are quantifiable and have a concrete deadline. For instance, you might want to reach a specific amount of revenue by a particular date. Then, as you start creating actionable steps, you can ensure they will lead to your ultimate mission.
• Analyze areas of improvement:  It’s also good to identify areas of weakness within your organization. Whether you haven’t met revenue goals or want to improve your customer service, acknowledging these weaknesses can help you resolve them during your plan. You can create concrete ways to respond to lacking areas, improving efficiency and success overall.
• Outline corporate goals:  Next, you should state your specific corporate goals for your institution. For instance, you might want to expand your customer base, reach a particular revenue number, or expand marketing campaigns. The more specific and quantifiable these goals are, the easier it will be to track your progress toward them.
• Delegate specific tasks:  You will need your entire team’s help to achieve broad organizational goals. By breaking down tasks and regulating them to specific departments or employees, you can foster a sense of responsibility and maintain even workloads.
• Consider your budget and staff:  Lastly, remember your staff and budget availability as you draft your strategic plan. Ensure you have enough resources to complete your goals by the desired deadline. For example, if you have a smaller staff, it might take you six months to reach a goal rather than three. Remembering your available resources can help you create realistic and successful objectives.

Every organization needs a strategic plan to stay on track with goals and move toward a successful future. Your plan helps you unify members around a shared vision and improve existing techniques. Strategic planning for financial institutions is crucial for overall success.

We’ve developed our  financial software  to meet the financial industry’s demands. Its high-quality tools and data can help you plan and execute goals. Use real-time updates to account for all data, or use our uniformly formatted reports to directly track your goal progress.

Let’s do this. To get started with AchieveIt,  request a demo today .

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How to Write a Successful Commercial Bank Business Plan (+ Template)

Creating a business plan is essential for any business, but it can be especially helpful for commercial bank businesses that want to improve their strategy or raise funding.

A well-crafted business plan not only outlines the vision for your company but also documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components essential to its success.

This article provides an overview of the key elements that every commercial bank business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a Commercial Bank Business Plan?

A commercial bank business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Commercial Bank Business Plan?

A commercial bank business plan is required for banks and investors. The document is a clear and concise guide to your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Commercial Bank Business Plan

The following are the critical components of a successful commercial bank business plan:

Executive Summary

The executive summary of a commercial bank business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your commercial bank company
• Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast, among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

You may not have a long company history if you are just starting your commercial bank business. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company or been involved in an entrepreneurial venture before starting your commercial bank firm, mention this.

You will also include information about your chosen commercial bank business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is a crucial component of a commercial bank business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the commercial bank industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support your company’s success)?

You should also include sources for your information, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, commercial bank customers may include small businesses, startups, and entrepreneurs.

You can include information about how your customers decide to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or commercial bank services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will differ from competitors and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your commercial bank business may have:

• Proven industry experience
• Extensive knowledge of the market
• Robust and innovative products and services
• Strong financial position
• Excellent customer service

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your commercial bank business via PR, by being quoted in the media, or by writing articles for industry publications.

Operations Plan

This part of your commercial bank business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, your Operations Plan will outline the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a commercial bank business include reaching $X in sales. Other examples include adding new products, entering new markets, or expanding your distribution channels.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific commercial bank industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Commercial Bank Firm

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : Everything you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Commercial Bank Firm

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include cash flow from:

• Investments

Below is a sample of a projected cash flow statement for a startup commercial bank business.

Sample Cash Flow Statement for a Startup Commercial Bank Firm

Finally, you will also want to include an appendix section including:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your commercial bank company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Now that you know how to write a business plan for your commercial bank, you can get started on putting together your own.  

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10 keys to a solid strategic plan for banks; Part I – Know the “now”

Sageworks July 16, 2012 Read Time: 0 min Print/PDF By John Owens, president, and David Harrop, chief operating officer, of financial services consulting firm BCI LLC

Why do banks need a strategic plan? There are numerous reasons, but the best one is that banks that plan well and execute their plans are better organizations. In our combined 70 years of experience as bankers and consultants, we have seen some common traits among banks that excel, and a solid strategic plan is one of those.

USAA Federal Savings Bank is a prime example:

• Forrester Research recognized USAA as the top performer in their 2012 Customer Experience Index.  (The first bank so recognized in the five-year history of the survey.)

• It ranks 20th in Fortune’s “100 Best Companies to Work For.”

• It consistently ranks in the top 10% of bank financial performance.

• It ranked first in financial performance for privately held banks above $2.5 billion in assets for 2011 by The Wall Street Journal.

So what should every strategic plan contain? We believe there are 10 key components, and the first five have to do with making sure the institution knows the “now” — itself, its competition and its differentiation. The second five, which we’ll discuss in a later post, have to do with planning where you want to go and how you’ll get there – planning the future.

1. Shared Core Values (Who we are and what we are made of). As one bank president commented, “The values provide guidance to help us set priorities and make decisions. They guide us as we strive to achieve our mission and vision.” 

The Ritz Carlton has their values embedded in what they refer to as “The Employee Promise:” “By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company.” As Jim Collins and Jerry Porras stated in their classic “Harvard Business Review” article , “You do not create core ideology. You discover core ideology.” 

2. Outcome (Mission) Statement (The result of all we do).  Jeff Easley, USAA’s executive director of deposit products management states, “Our mission is to facilitate the financial security of our members. It is our DNA.” Notice that there is no mention of earnings, service area, return to shareholders, giving back to the community, safety and soundness, etc. While they are able to do these things, each results from USAA’s values and excellent strategic execution.

3. Purpose Statement  (Why we do what we do). Jim Collins observed that the most successful companies he worked with possessed core values and a core purpose that remained fixed, even as their business strategies and practices endlessly adapted to a changing world. 

Some examples of core purposes are:

• Nike: To experience the emotion of competition, winning and crushing opponents.

• Disney: To make people happy.

4. The Competitive Edge (What do we do better than anyone else?) This is the value proposition, the differentiator. As Michael Porter, Harvard professor, writer and consultant, wrote in Competitive Advantage, “There are two basic types of competitive advantage: cost leadership and differentiation.” Fundamentally, the competitive edge grows out of the value an organization is able to create that exceeds the cost of creating it. In today’s environments, bankers must create an irresistible reason for people to do business with them.

5. Situation Analysis.  This is a critical component. Realistically, you must assess the bank’s strengths and weaknesses in comparison to current and future competitors. Identify opportunities and threats. Analyze peer and market data.

Part II of this blog post will focus on 5 strategic plan components that take charge of the future, including strategic goals, action plans, and measuring results.

For more information on what financial institutions can do to balance each component of the CAMELS rating, download the whitepaper, Bank Examinations: Balancing CAMELS Ratings .

John Owens is president, and David Harrop is chief operating officer of BCI LLC , a financial services consulting firm that helps clients resolve and manage complex business issues, streamline business practices, mitigate risk, and enhance their performance. Owens is based in Pawleys Island, S.C., while Harrop is based in Bella Vista, Ark.

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Strategic planning in 5 steps

Strategic planning is a very useful tool to help you achieve your business objectives and stand out from your competitors. No matter the size of your company, the process will equip you with an action plan to guide you in the coming years. We'll explain exactly what a strategic plan is, its advantages and how to put it into action. 

What is strategic planning?

• Get prepared and carry out the preliminary assessment
• Diagnose and seize opportunities
• Prioritize based on diagnostics
• Establish the budget and necessary resources
• Implement the plan and respect timelines

Strategic planning is taking time to think about business opportunities, determine where your business is now and where you want to take it. The strategic planning process will result in a plan that will guide you in achieving your business objectives. A strategic plan includes:

• Actions to take 
• How you'll monitor progress

Reminder: Strategic planning should be used at all stages of a business's lifecycle (start-up and periods of growth or significant change). Strategic planning is useful even when business is going great and you're experiencing growth. To keep up momentum, you must take a clear position and stick to the plan   

The advantages of strategic planning 

Here's why taking the time and effort to draw up a strategic plan is worth your while. 

• Improve productivity and efficiency: Your strategic plan will help you to optimize all your company's resources. It can also facilitate decision-making and help you avoid making mistakes. 
• Open the door to growth: By detailing the steps to achieving your objectives, you'll be in a better position to take action (acquire a new business, buy equipment, etc.). It's one of the tools you can use to grow your business . 
• Be more competitive: You'll be better prepared to deal with the unexpected and seize new opportunities. You can choose the best drivers of growth, complete your current offering, develop new markets, determine future growth segments, and better position yourself relative to the competition.
• Innovate: The plan will help your company maintain or create a culture of innovation by finding ways to do things differently. It can also help you turn towards new activity sectors.
• Unify and strengthen your teams: The plan will help you develop a shared vision and clearly communicate to employees what your objectives are and how to achieve them. 
• Take a step back: Step back from the daily whirlwind to think and make changes, if necessary. 

Good to know: A strategic plan isn't a business plan

A strategic plan shouldn't be confused with a business plan , but the two plans do complement each other. A business plan allows you to understand how your business works day to day and what must be done to properly manage it. A strategic plan helps you to look ahead. It explains how you'll achieve your goals and make your vision a reality.

What are the 5 steps of strategic planning?

1- get prepared and carry out the preliminary assessment.

Build a team

Starting a strategic planning exercise on solid footing requires the right people. You'll need some stakeholders who are creative and others who have a solid understanding of how your business operates. Of course, to maximize your chances for success, the company head and its leaders need to participate and support the process. It's not only the leaders who should be taking part. Key employees should also be involved. Designate the people who'll be in charge. They'll be responsible for documenting activities and consolidating everything.

Pro tip: Consider hiring an external consultant to help with your strategic planning. An experienced person with no vested interest in the business can help simplify your task, push you out of your comfort zone, and make the process run more smoothly. 

Get away from daily distractions

Make sure that when your key people meet, they're able to leave their daily tasks behind for a while. To bring the group together and give them time to focus, they could meet off the company premises (e.g., a retreat). Expert advice: Preparatory work before the meeting can help to generate new ideas. Participants could spend some time beforehand thinking about what will be discussed so they have ideas to share with the group when they meet.

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Analyze the foundations

To lay a solid foundation on which to build in the coming years, review the company's mission, vision and values . This will help ensure that decisions made during the strategic planning are aligned with what the company stands for.

Examine previous strategic plans

If there was a previous strategic plan, take the time to review it and do a strategic analysis to see what you can learn from it. Understanding what worked and what didn't will be very useful for building a new, more solid plan. 

2- Diagnose and seize opportunities

When you reach the second step, ask yourself these questions:

• What are the company's strengths and weaknesses?
• What business opportunities should we seize?
• What potential obstacles are there?
• How do we mitigate risk?

Gather all the relevant information to help you answer the questions. You could ask all employees, regardless of their level, to send you their thoughts and impressions. Once you've received them all, take their answers into account during the strategic planning process. Next, you might consider:

• Analyzing the characteristics of current and future clients
• Reviewing your supplier accounts
• Checking whether the payment conditions meet industry standards
• Examining company productivity
• Determining whether you have enough employees to successfully carry out your new projects
• Thinking about who your clients are, what they want, and how to meet their needs
• Anticipating the expectations and needs of future clients

When you've completed the diagnosis, you can design strategies that are better adapted and well-thought-out. You'll be in a better position to solve the problems you've identified and change your methods, if necessary. You'll also be better prepared to seize the opportunities that arise and achieve the goals you've set. 

3- Prioritize based on diagnostics

Diagnostics help you to establish a clear vision for the company and determine the resulting objectives. To achieve them, you must break the vision down into several strategic orientations. Based on the objectives, choose the relevant areas of development that the company will prioritize. Next, establish the sequence of concrete actions to carry out and set timelines. The number of actions and the pace are important things to consider.  It's better to have fewer objectives and carry out your actions properly than to have too much to do and discourage your employees.

Generally, a strategic plan is carried out over a 2- to 3-year period. Beyond this time (e.g., 5 years), too many unknowns like the markets and new, rapidly evolving technologies could jeopardize the plan.

Pro tip: At this stage, look at the choices made by the managers and employees. Communication and feedback will increase the chances of employees buying in.

Now the time has finally come to draft your strategic planning document.

4- Establish the budget and necessary resources

The financial aspects are key to achieving your objectives. The document detailing the plan must therefore:

• Put a cost to the required investments
• Project the financial returns
• Determine the necessary resources
• Plan how you'll get the resources
• Set the budget

5- Implement the plan and respect timelines

The final step in your strategic planning: do what's necessary to put the plan into action. Follow up regularly on the actions and projects currently being carried out (e.g., budgets). This is an ongoing process: Be flexible, stay up to date on the market and any changes (technological, demographic, etc.) so you can make any adjustments. Remember that when the strategic plan comes to life, it can continue to evolve.

For short-term action plans (up to 1 year), opt for monthly follow-ups. For long-term plans over 3–10 years, follow up monthly, quarterly, and annually.

Pro tip: Consider creating a dashboard to make it easier to follow up and monitor progress.

Good to know: There are many approaches to strategic planning, such as the 3-C method (client, competition, company), the lean approach, the mission-based approach, or a combination of the three. No matter which you decide on, the exercise will help you take your company to the next level.

Strategic planning is a powerful business development tool. The process will serve to establish a plan that maximizes your chances for success. It will also help you stay the course when the going gets tough. Feel free to ask for advice or support from an expert. We’re here to answer your questions. 

Find out how

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Business plan

How to write an effective business plan in 11 steps (with workbook)

February 28, 2024 | 14 minute read

Writing a business plan is a powerful way to position your small business for success as you set out to meet your goals. Landmark studies suggest that business founders who write one are 16% more likely to build viable businesses than those who don’t and that entrepreneurs focused on high growth are 7% more likely to have written a business plan. HBR. July 14, 2017. Available online at https://hbr.org/2017/07/research-writing-a-business-plan-makes-your-startup-more-likely-to-succeed" data-footnote="sevenpercent" aria-label="Footnote 1" data-options="{"interstitialType":"leaving-site","targetAction":"new-tab"}" class="spa-ui-layer-link spa-fn spa-ui-layer-interstitial"> Footnote [1] Even better, other research shows that owners who complete business plans are twice as likely to grow their business successfully or obtain capital compared with those who don’t. Footnote [2]

The best time to write a business plan is typically after you have vetted and researched your business idea. (See How to start a business in 15 steps .) If conditions change later, you can rewrite the plan, much like how your GPS reroutes you if there is traffic ahead. When you update your plan regularly, everyone on your team, including outside stakeholders such as investors, will know where you are headed.

What is a business plan?

Typically 15-20 pages long, a business plan is a document that explains what your business does, what you want to achieve in the business and the strategy you plan to use to get there. It details the opportunities you are going after, what resources you will need to achieve your goals and how you will define success.

Why are business plans important?

Business plans help you think through barriers and discover opportunities you may have recognized subconsciously but have not yet articulated. A business plan can also help you to attract potential lenders, investors and partners by providing them with evidence that your business has all of the ingredients necessary for success.

What questions should a business plan answer?

Your business plan should explain how your business will grow and succeed. A great plan will provide detailed answers to questions that a banker or investor will have before putting money into the business, such as:

• What products or services do you provide?
• Who is your target customer?
• What are the benefits of your product and service for customers?
• How much will you charge?
• What is the size of the market?
• What are your marketing plans?
• How much competition does the business face in penetrating that market?
• How much experience does the management team have in running businesses like it?
• How do you plan to measure success?
• What do you expect the business’s revenue, costs and profit to be for the first few years?
• How much will it cost to achieve the goals stated in the business plan?
• What is the long-term growth potential of the business? Is the business scalable?
• How will you enable investors to reap the rewards of backing the business? Do you plan to sell the business to a bigger company eventually or take it public as your “exit strategy”?

How to write a business plan in 11 steps

This step-by-step outline will make it easier to write an effective business plan, even if you’re managing the day-to-day demands of starting a new business. Creating a table of contents that lists key sections of the plan with page numbers will make it easy for readers to flip to the sections that interest them most.

Use our editable workbook to capture notes and organize your thoughts as you review these critical steps. Note: To avoid losing your work, please remember to save this PDF to your desktop before you begin.

1. Executive summary

The executive summary is your opportunity to make a great first impression on investors and bankers. It should be just as engaging as the enthusiastic elevator pitch you might give if you bumped into a potential backer in an elevator.

In three to five paragraphs, you’ll want to explain what your business does, why it will succeed and where it will be in five years. The executive summary should include short descriptions of the following:

• Business concept. What will your business do?
• Goals and vision. What do you expect the business to achieve, both financially and for other key stakeholders, such as the community?
• Product or service. What does your product or service do — and how is it different from those of competitors?
• Target market. Who do you expect to buy your product or service?
• Marketing strategy. How will you tell people about your product or service?
• Current revenue and profits. If your business is pre-revenue, offer sales projections.
• Projected revenue and profits. Provide a realistic look at the next year, as well as the next three years, ideally.
• Financial resources needed. How much money do you need to borrow or raise to fund your plan?
• Management team. Who are the company’s leaders and what relevant experience will they contribute?

2. Business overview

Here is where you provide a brief history of the business and describe the product(s) or service(s) it offers. Make sure you describe the problem you are attempting to solve, for whom you will solve it (your customers) and how you will solve it. Be sure to describe your business model (such as direct-to-consumer sales through an online store) so readers can envision how you will make sales. Also mention your business structure (such as a sole proprietorship , general partnership, limited partnership or corporation) and why it is advantageous for the business. And be sure to provide context on the state of your industry and where your business will fit into it.

3. Business goals and vision

Explain what you hope to achieve in the business (your vision) as well as its mission and value proposition. Most founders judge success by the size to which they grow the business using measures such as revenue or number of employees. Your goals may not be solely financial. You may also wish to provide jobs or solve a societal problem. If that’s the case, mention those goals as well.

If you are seeking outside funding, explain why you need the money, how you will put it to work to grow the business and how you expect to achieve the goals you have set for the business. Also explain your exit strategy—that is, how you would enable investors to cash out, whether that means selling the business or taking it public.

4. Management and organization

Many investors say they bet on the team behind a business more than the business idea, trusting that talented and experienced people will be capable of bringing sound business concepts to life. With that in mind, make sure to provide short bios of the key members of your management team (including yourself) that emphasize the relevant experience each individual brings, along with their special talents and industry recognition. Many business plans include headshots of the management team with the bios.

Also describe more about how your organization will be structured. Your company may be a sole proprietorship, a limited liability company (LLC) or a corporation in one or more states.

If you will need to hire people for specific roles, this is the place to mention those plans. And if you will rely on outside consultants for certain roles — such as an outsourced CFO — be sure to make a note of it here. Outside backers want to know if you’ve anticipated the staffing you need.

5. Service or product line

A business will only succeed if it sells something people want or need to buy. As you describe the products or services you will offer, make sure to explain what benefits they will provide to your target customers, how they will differ from competing offerings and what the buying cycle will likely be so it is clear that you can actually sell what you are offering. If you have plans to protect your intellectual property through a copyright or patent filing, be sure to mention that. Also explain any research and development work that is underway to show investors the potential for additional revenue streams.

6. Market/industry analysis

Anyone interested in providing financial backing to your business will want to know how big your company can potentially grow so they have an idea of what kind of returns they can expect. In this section, you’ll be able to convey that by explaining to whom you will be selling and how much opportunity there is to reach them. Key details to include are market size; a strengths, weaknesses, opportunities and threats (SWOT) analysis ; a competitive analysis; and customer segmentation. Make it clear how you developed any projections you’ve made by citing interviews or research.

Also describe the current state of the industry. Where is there room for improvement? Are most companies using antiquated processes and technology? If your business is a local one, what is the market in your area like? Do most of the restaurants where you plan to open your café serve mediocre food? What will you do better?

In this section, also list competitors, including their names, websites and social media handles. Describe each source of competition and how your business will address it.

7. Sales and marketing

Explain how you will spread the word to potential customers about what you sell. Will you be using paid online search advertising, social media promotions, traditional direct mail, print advertising in local publications, sponsorship of a local radio or TV show, your own YouTube content or some other method entirely? List all of the methods you will use.

Make sure readers know exactly what the path to a sale will be and why that approach will resonate with customers in your ideal target markets as well as existing customer segments. If you have already begun using the methods you’ve outlined, include data on the results so readers know whether they have been effective.

8. Financials

In a new business, you may not have any past financial data or financial statements to include, but that doesn’t mean you have nothing to share. Preparing a budget and financial plan will help show investors or bankers that you have developed a clear understanding of the financial aspects of running your business. (The U.S. Small Business Administration (SBA) has prepared a guide you can use; SCORE , a nonprofit organization that partners with the SBA, offers a financial projections template to help you look ahead.) For an existing business, you will want to include income statements, profit and loss statements, cash flow statements and balance sheets, ideally going back three years.

Make a list of the specific steps you plan to take to achieve the financial results you have outlined. The steps are generally the most detailed for the first year, given that you may need to revise your plan later as you gather feedback from the marketplace.

Include interactive spreadsheets that contain a detailed financial analysis showing how much it costs your business to produce the goods and services you provide, the profits you will generate, any planned investments and the taxes you will pay. See our startup costs calculator to get started.

9. Financial projections

Creating a detailed sales forecast can help you get outside backers excited about supporting you. A sales forecast is typically a table or simple line graph that shows the projected sales of the company over time with monthly or quarterly details for the next 12 months and a broader projection as much as five years into the future. If you haven’t yet launched the company, turn to your market research to develop estimates. For more information, see “ How to create a sales forecast for your small business .”

10. Funding request

If you are seeking outside financing such as a loan or equity investment, your potential backers will want to know how much money you need and how you will spend it. Describe the amount you are trying to raise, how you arrived at that number and what type of funding you are seeking (such as debt, equity or a combination of both). If you are contributing some of your own funds, it is worth noting this, as it shows that you have skin in the game.

11. Appendix

This should include any information and supporting documents that will help investors and bankers gain a greater understanding of the potential of your business. Depending on your industry, you might include local permits, licenses, deeds and other legal documents; professional certifications and licenses; media clips; information on patents and other intellectual property; key customer contracts and purchase orders; and other relevant documents.

Some business owners find it helpful to develop a list of key concepts, such as the names of the company’s products and industry terms. This can be helpful if you do business in an industry that may not be familiar to the readers of the business plan.

Tips for creating an effective business plan

Use clear, simple language. It’ll be easier to win people over if your plan is easy to read. Steer clear of industry jargon, and if you must use any phrases the average adult won’t know, be sure to define them.

Emphasize what makes your business unique. Investors and bankers want to know how you will solve a problem or gap in the marketplace differently from anyone else. Make sure you’re conveying your differentiating factors.

Nail the details. An ideal business plan will be detailed and accurate. Make sure that any financial projections you make are realistic and grounded in solid market research. (If you need help in making your calculations, you can get free advice at SCORE.) Seasoned bankers and investors will quickly spot numbers that are overly optimistic.

Take time to polish it. Your final version of the plan should be neat and professional with an attractive layout and copy that has been carefully proofread.

Include professional photos. High-quality shots of your product or place of business can help make it clear why your business stands out.

Updating an existing business plan

Some business owners in rapidly growing businesses update their business plan quarterly. Others do so every six months or every year. When you update your plan make sure you consider these three things:

1. Are your goals still current? As you’ve tested your concept, your goals may have changed. The plan should reflect this.

2. Have you revised any strategies in response to feedback from the marketplace? You may have found that your offerings resonated with a different customer segment than you expected or that your advertising plan didn’t work and you need to try a different approach. Given that investors will want to see a marketing and advertising plan that works, keeping this section current will ensure you are always ready to meet with one who shows interest.

3. Have your staffing needs changed? If you set ambitious goals, you may need help from team members or outside consultants you did not anticipate when you first started the business. Take stock now so you can plan accordingly.

Final thoughts

Most business owners don’t follow their business plans exactly. But writing one will get you off to a much better start than simply opening your doors and hoping for the best, and it will be easier to analyze any aspects of your business that aren’t working later so you can course-correct. Ultimately, it may be one of the best investments you can make in the future of your business.

Business plan FAQs

The biggest mistake you can make when writing a business plan is creating one before the idea has been properly researched and tested. Not every idea is meant to become a business. Other common mistakes include:

• Not describing your management team in a way that is appealing to investors. Simply cutting and pasting someone’s professional bio into the management section won’t do the trick. You’ll want to highlight the credentials of each team member in a way that is relevant to this business.
• Failing to include financial projections — or including overly optimistic ones. Investors look at a lot of business plans and can tell quickly whether your numbers are accurate or pie in the sky. Have a good small business accountant review your numbers to make sure they are realistic.
• Lack of a clear exit strategy for investors. Investors may want the option to cash out eventually and would want to know how they can go about doing that.
• Slapdash presentation. Make sure to fact-check any industry statistics you cite and that any charts, graphs or images are carefully prepared and easy to read.

There are a variety of styles of business plans. Here are three major types:

Traditional business plan. This is a formal document for pitching to investors based on the outline in this article. If your business is a complicated one, the plan may exceed the typical length and stretch to as many as 50 pages.

One-page business plan. This is a simplified version of a formal business plan designed to fit on one page. Typically, each section will be described in bullet points or in a chart format rather than in the narrative style of an executive summary. It can be helpful as a summary document to give to investors — or for internal use. Another variation on the one-page theme is the business model canvas .

Lean plan. This methodology for creating a business plan is ideal for a business that is evolving quickly. It is designed in a way that makes it easy to update on a regular basis. Lean business plans are usually about one page long. The SBA has provided an example of what this type of plan includes on its website.

Many elements of a business plan for a nonprofit are similar to those of a for-profit business. However, because the goal of a nonprofit is achieving its mission — rather than turning a profit — the business plan should emphasize its specific goals on that front and how it will achieve them. Many nonprofits set key performance indicators (KPIs) — numbers that they track to show they are moving the needle on their goals.

Nonprofits will generally emphasize their fundraising strategies in their business plans rather than sales strategies. The funds they raise are the lifeblood of the programs they run.

A strategic plan is different from the type of business plan you’ve read about here in that it emphasizes the long-term goals of the business and how your business will achieve them over the long run. A strong business plan can function as both a business plan and a strategic plan.

A marketing plan is different from a business plan in that it is focused on four main areas of the business: product (what you are selling and how you will differentiate it), price (how much your products or services will cost and why), promotion (how you will get your ideal customer to notice and buy what you are selling) and place (where you will sell your products). A thorough business plan may cover these topics, doing double duty as both a business plan and a marketing plan.

The Small Business Community is now Small Business Resources .

Six digital growth strategies for banks

Despite the headlines about digital disruption in financial services, big banks are actually holding their own. Globally, financial-services revenues have grown 4 percent annually over the past ten years (thanks largely to growth in emerging markets), and fintech start-ups and large tech companies have so far captured only tiny slivers of market share.

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But digital technology and big data/analytics are still poised to shake up the financial-services industry. Investors believe fintech start-ups will become a significant force in the future, valuing those in the US at $120 billion, or 7 percent of the total equity of US banks.

As we see it, many banks haven’t set their sights nearly high enough in response to disruptive attackers. They’ve been overly cautious, playing defense, with me-too digital initiatives primarily designed to counter moves by actual or potential disruptors. Even banks that would like to be more aggressive find it difficult to know exactly what to do. Large banks—like many incumbents—have been inundated with new technologies and business opportunities, leaving them confused about where to focus and dissipating their resources.

Most big banks have the tools and advantages to push the boundaries of their existing business models. And they’re certainly motivated. What hampers their progress is uncertainty about how best to build on core strengths to create sustainable outcomes.

To provide a structure for navigating this chaos, and to galvanize the shift to bolder thinking, we’ve identified six opportunities for banks to fuel future growth.

1. Grow beyond your core into relevant ecosystems

Banks have long relied on making customers aware of relevant products as a path to growth. In the past, that approach was about introducing other banking products. For example, a customer with a checking account would be encouraged to consider a personal line of credit, a home-improvement loan, or a bank credit card (see inner circle of exhibit, labeled Core).

A narrow focus on core adjacencies ignores the broader role a bank can play on behalf of its customers. By moving into ecosystems beyond the traditional core, banks are able to tap their existing client base and operational capabilities, strengthen engagement, and capture data that will provide a more complete view of customers’ needs.

Ideabank and ING, for example, have extended into banking adjacencies (see middle ring in exhibit) by providing services like accounts-receivable management, factoring, accounting, and cash-flow analysis to small and medium enterprise (SME) customers. The fintech start-up Moven built a pioneering mobile money-management app and is now partnering with financial institutions to provide this service to retail customers.

Some banks have even gone farther and moved into nonbanking adjacencies (see outer ring in exhibit). Post Bank, for example, has become the largest provider of mobile phone services in Italy. Other banks are partnering with care providers and health insurers to provide a consolidated billing platform that makes it easier for consumers to pay for medical expenses.

Extending beyond the core can allow banks to form a network of value across industries and create their own “ecosystems” that provide the services customers want at lower cost and with greater convenience. In addition to generating new revenues, ecosystems of this sort can protect banks from the efforts of fintech start-ups and digital giants to invade banking’s traditional turf.

Banks should consider this option if … they have significant market share in one or more core product areas. Banks in this position may find it difficult to increase their share in existing segments. Moving into adjacencies—both banking and nonbanking—allows them to take advantage of their already strong franchises by offering new services to current customers.

2. Create a financial supermarket

Taking a page from some of the larger digital businesses, banks can offer a curated and vetted mix of internal and third-party offerings. This aggregation model provides customers with easy, one-stop access to financial products and the ability to address multiple financial needs through a single, integrated channel. Building a financial supermarket allows a bank to focus on the high-return side of the industry: average annual return on equity (RoE) for providing credit from bank balance sheets is only 6 percent , while RoE for product origination/sales is 22 percent. 1 1. RoE figures based on analysis by McKinsey’s Financial Services Practice.

In the United Kingdom, for instance, 60 percent of auto-insurance policies are sold through aggregators. And Bank Bazaar in India, a pure-play financial supermarket with no proprietary offerings of its own, offers a full set of services from more than 50 institutions to more than 23 million customers.

To build privileged relationships with customers, some financial supermarkets rely on recommendation engines, which use transaction, merchant, and customer data generated from the platform to provide personalized suggestions and offers. This kind of helpful, concierge-style service can reduce the risk of disintermediation.

Banks should consider this option if.... breadth of choice or price comparisons are important to customers. The former is often the case with investment products, for example, and the latter for property-and-casualty insurance. A supermarket approach can allow banks without a strong position in such areas to grow in these segments as a complement to their current offerings.

3. Extend value across the customer journey

For most consumers, working with a bank is just a means to an end: ensuring a secure retirement, growing a business, or buying a home, for example. Most banks, however, tend to focus only on discrete, bank-centered moments in the customer’s overall journey, such as offering a mortgage, when the customer’s larger goal is buying the house. By attending only to the bank-related part of the overall journey, banks leave considerable value on the table.

Banks can grow by engaging with consumers at other stages of their decision journey. For example, a bank might give advice to customers on how much to save for retirement or borrow for a home, or help them to determine the best rates and maturities for financial instruments.

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Commonwealth Bank in Australia (CBA), for example, wanted to play a bigger role in the home buyer’s journey. CBA created an augmented-reality app that allows users to point their smartphone’s camera at a property and instantly see its current price and sales history. The app also provides a mortgage calculator and other financial tools, plus the option to connect with local realtors. In the six months after the app’s release, customers searched more than a million properties, and the bank estimated the project’s return on investment at more than 100 percent. 2 2. Peter Weill and Stephanie L. Woerner, “Thriving in an Increasingly Digital Ecosystem,” Sloan Management Review , Summer 2015, 27-34. See also Commonwealth Bank, Investorville Case Study, 2013.

Banks should consider this option if.... they have significant market share in financial products that are integral to a larger buying process. Mortgages (tied to home buying), auto finance (tied to car buying), and credit cards (tied to taxi/ride-sharing trips and restaurant visits) are examples of such products. Engaging across buying journeys can allow banks in such a position to gain access to a larger pool of potential revenue and enrich the overall relationship with their customers.

4. Monetize your data

More than half of financial-services respondents in a recent McKinsey survey said their companies have begun monetizing data. What’s more, data monetization seems to correlate with industry-leading performance.

There are multiple ways to monetize data. The first is for a bank to use its internal data more effectively for its own operations by adding new analytics capabilities. Another is to create new offerings, such as reports or benchmark analytics, based on bank data. Several of Canada’s biggest banks have partnered with Toronto-based SecureKey in a system that allows individuals to use their bank credentials to access online services from the federal government. The system works in much the same way as websites that allow users to log in using their Facebook account—except in this case, Canadian government agencies provide access to online services when visitors enter their bank credentials. The banks just use the data they already have to verify their customers’ identities, but then provide it as a secure  capability at a truly national scale and gain access to new potential customers.

Most banks have a rich set of exclusive information on their customers (key demographic details, where they live, their lifestyle preferences). When used responsibly, with respect for regulatory constraints and privacy concerns, this bank data can be analyzed for insights valuable to companies in industries outside of financial services, such as telecom, retail, consumer goods, or automotive. Bank-issued credit cards , for example, have access to data on both consumers and merchants, which can be sold to retailers.

Banks should consider this option if … they already possess an information advantage over competitors—or if they have the prospect of creating an information advantage, or extending an existing one, via external investments or partnerships.

Remaking the bank for an ecosystem world

5. become a product- or infrastructure-sourcing factory.

Many banks and fintechs are locked in a battle over the customer-facing front end. But large institutions can create significant value by leveraging back-end assets to create and provide products or services to smaller banks and other businesses. That’s because many small and nontraditional institutions lack core banking products, infrastructure, capital assets, or even banking licenses, and don’t have the reach or resources to acquire them.

Large financial institutions can address this need by developing a portfolio of white-label products to sell to or through third parties, providing infrastructure as a service, and even “renting” their balance sheet to small and nonfinancial players. The classic example of this kind of service is banks providing credit-card processing to retailers. In the evolving digital era, many new opportunities to offer services like this are emerging.

ING, for example, has partnered with US-based fintech start-up Kabbage to serve SME customers in Europe. Kabbage’s easy-to-use interface and novel risk-management algorithms allow it to deliver decisions on loan applications in a matter of minutes. As a start-up, Kabbage had a distinctive new capability but lacked capital and customer relationships. ING brought to the partnership its deep reservoir of capital and its existing relationships with prospective SME customers.

Banks should consider this option if.... they possess a significant back-end capability that others don’t have and the ability to extend it into other environments securely. Banks considering a factory plan, for example, should have enough tech talent (particularly around APIs) to be able to maintain appropriate levels of security while serving the given product or service to third parties. In addition to opening up new revenue streams, this approach can also be a useful way for to banks to collect new data.

6. Become a digital attacker

By employing digital channels or novel business models, incumbent banks can enter new geographies or market segments that would be prohibitively expensive targets using traditional approaches.

ING Direct was the original digital attacker, starting as an exclusively online bank in 1996 and attracting more than 20 million customers in 9 countries over a little more than a decade, before spinning off several of its national subsidiaries in the late 2010s. 3 3. Arkadi Kuhlmann and Bruce Philp, The Orange Code: How ING Direct succeeded by being a rebel with a cause , Wiley, 2008.

Banks should consider this option if.... they want to enter new markets or segments without the need to invest in the physical infrastructure that would otherwise make such moves prohibitively expensive. This approach is useful for exploring market opportunities, but it requires sufficient digital skills (design, customer experience, analytics, etc.), the expertise to scale wins, and the management discipline to kill off poor performers.

How should banks decide which unconventional growth opportunities to pursue? There is no one-size-fits-all answer.

We’ve found that most large institutions already have some initiatives underway that involve pursuing one or more of these six growth strategies. Existing efforts can provide important information about which opportunities are promising and what’s required for success. That said, most such initiatives are small and typically need to be scaled up to take full advantage of opportunities large banks face.

To begin, banks should think hard about a series of questions:

• Which unconventional growth opportunities represent a good fit with current resources and competitive position?
• How many of the opportunities can reasonably be pursued and over what time?
• What governance structures should be established, and what organizational approaches employed? Innovate from within existing businesses, set up separate units, or partner with/acquire from outside?
• What capabilities should be in place to go after these opportunities?

No matter which opportunities banks decide to pursue, they will need to commit to—and invest in—new digital capabilities in areas like design, innovation, data and analytics, personalization, and digital marketing. A headlong dash toward developing “all” these capabilities isn’t the answer. We have seen companies lose focus and dissipate energies by trying to do too much at once.

In our experience, the most effective route is to develop a clear view of which capabilities can deliver the most value quickly and power a broader digital transformation. The important thing is to get going, to act with a sense of urgency—like an attacker seeking growth, not merely a defender hoping to hold onto a legacy position.

Somesh Khanna is a senior partner based in McKinsey’s New York office and global leader of Digital McKinsey in financial services. Heitor Martins is a senior partner based in our São Paulo office and leads Digital McKinsey in Latin America.

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Banking Strategy Plan Template

What is a Banking Strategy Plan?

A banking strategy plan is a set of goals and objectives created by financial institutions, such as banks and credit unions, to increase growth and profitability. These plans are often developed in order to create a competitive advantage, reach new markets, and improve customer satisfaction. A banking strategy plan outlines the key focus areas, objectives, and associated actions needed to reach the desired goals.

What's included in this Banking Strategy Plan template?

• 3 focus areas
• 6 objectives

Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.

Who is the Banking Strategy Plan template for?

This banking strategy plan template is designed for banks and credit unions of any size. Whether you're a small local bank or a large international corporation, this template provides the structure to develop a comprehensive plan to increase growth and profitability.

1. Define clear examples of your focus areas

Focus areas are the overarching themes that define the direction of the banking strategy plan. Examples of focus areas may include increasing customer satisfaction, expanding digital offerings, and increasing security. A clear focus area should be identified and objectives should be set to achieve the desired results.

2. Think about the objectives that could fall under that focus area

Objectives are specific targets that need to be achieved in order to reach the desired focus area. Examples of some objectives for the focus area of Increase Customer Satisfaction could be: Enhance customer experience, and Improve customer access. Objectives should be achievable, measurable, and relevant to the focus area.

3. Set measurable targets (KPIs) to tackle the objective

Key performance indicators (KPIs) are measurable objectives that are used to track the progress of an objective. For example, under the objective of enhancing customer experience, a KPI could be to increase customer satisfaction from a rating of 5 to 9. KPIs should be measurable, relevant, and have an initial and target value.

4. Implement related projects to achieve the KPIs

Projects (actions) are the specific initiatives that need to be completed in order to achieve the objectives and KPIs. For example, under the objective of enhancing customer experience, a project could be to improve customer service. Projects should be achievable, measurable, and relevant to the KPI.

5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy

Cascade Strategy Execution Platform helps financial institutions develop, manage, and execute their banking strategy plan. Cascade provides an easy-to-use interface to create objectives, set KPIs, and track progress. By utilizing Cascade, you can ensure that your banking strategy plan is successful and see faster results.

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Anil Singhvi strategy April 29: Important levels to track in Nifty50, Nifty Bank today

Anil singhvi market strategy: zee business managing editor anil singhvi shares his strategy for today's session on dalal street. check out his take on key support and resistance levels for the nifty and the nifty bank, and how he views the market..

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Anil Singhvi Market Strategy : Zee Business Managing Editor Anil Singhvi sees support emerging at 22,300-22,375 levels and a strong buy zone at 22,150-22,200 levels for the headline Nifty50 index on Monday, April 29 . For the Nifty Bank, he expects support to come in at 47,900-48,075 levels and a strong buy zone at 47,625-47,775 levels.

Here's how Anil Singhvi sums up the market setup:

Global: Positive 

FII: Negative

DII: Positive  

F&O: Neutral

Sentiment: Neutral

Trend: Positive

He expects a higher level for the headline index at 22,500-22,575 levels and a profit-booking zone at 22,625-22,700 levels. 

For the banking index, Singhvi expects a higher zone at 48,425-48,575 levels and a profit-booking zone at 48,625-48,725 levels. 

ANIL SINGHVI MARKET STRATEGY   

FII index longs at 35 per cent vs 39 per cent the previous day

Nifty put-call ratio (PCR) at  0.96 vs 1.28

Nifty Bank PCR at 0.85 vs 1.16

Volatility index India VIX up two per cent at 10.93

Editor's take

• Global markets to support sentiment on Dalal Street
• FII outflows may cause pressure at higher levels
• Expect buying in midcap and smallcap stocks
• One may use a gap-up opening to book profit in the higher range
• Market participants have an eye on low voting turnout
• Nifty Bank to be supported by ICICI Bank and RBL Bank results

For existing long positions:

Nifty intraday and closing stop loss at 22,300

Nifty Bank intraday and closing stop loss at 48,000

For existing short positions:

• Nifty intraday and closing stop loss at 22,625
• Nifty Bank intraday and closing stop loss at 48,725

For new positions in Nifty:

Buy Nifty with a stop loss at 22,300 for targets of 22,475, 22,500, 22,550, 22,575 and 22,625

The best range to sell Nifty is 22,550-22,625 with a stop loss at 22,700 for targets of 22,500, 22,450, 22,425, 22,400, 22,375 and 22,300

For new positions in Nifty Bank:

Buy Nifty Bank with a stop loss at 47,900 for targets of 48,425, 48,475, 48,575, 48,625, 48,675 and 48,725

Aggressive traders can sell Nifty Bank in the 48,500-48,675 range with a strict stop loss at 48,750 for targets of 48,425, 48,300, 48,200, 48,100 and 48,025

F&O ban update

• Already in ban: Vodafone Idea
• New in ban: None
• Out of ban: None

Results reviews

ICICI Bank 

• Buy ICICI Bank futures with a stop loss at Rs 1,099 for targets of Rs 1,123 and Rs 1,138
• Numbers strong on all parameters except no improvement in NIM
• Operational performance very strong
• Buy RBL Bank futures with a stop loss at Rs 262 for targets of Rs 271, Rs 273 and Rs 278
• Performance strong on all parameters
• Don't buy if the stock makes a big gap-up start
• Profit booking expected at higher levels

IDFC First Bank 

• Results weak on all parameters
• Futures have support at Rs 81 and Rs 83, and a higher level at Rs 88
• Results in line with estimates
• Nothing great, nothing bad
• Operational performance weak
• Recovery slow
• Book profit in case of a gap-up opening
• Futures have support at Rs 1,443 and a higher level at Rs 1,510
• Numbers below estimates on all parameters
• The stock can see a small downside
• Buying support expected at lower levels

Maruti Suzuki 

• Futures have support at Rs 12,750 and Rs 12,690, and higher levels at Rs 12,930 and Rs 13,020
• Strong topline
• Profit and EBITDA below estimates
• The stock may see a small downside

Stocks Of The Day

Buy SBI Card futures with a stop loss at Rs 744 for targets of Rs 770, Rs 785 and Rs 800

• Results strong 
• Profit much above expectation
• Stable asset quality
• Revolver credit improved to 24 per cent after eight quarters
• SBI Card has issued three new travel and leisure credit cards
• Next quarter expected to be better

Buy Patanjali Foods shares in the cash segment with a stop loss at Rs 1,560 for targets of Rs 1,660 and Rs 1,700

• Investors keep a target of Rs 1,850
• Patanjali Foods gets proposal to acquire non-food business from Patanjali Ayurved
• Patanjali Foods to appoint valuers to evaluate proposal

Buy Shriram Finance futures with a stop loss at Rs 2,465 for targets of Rs 2,580 and Rs 2,610

• Results came on Friday
• Big upgrades from FII brokerages
• Jefferies has raised its target to Rs 2,950 from Rs 2,750
• JPMorgan and Citi have raised targets

Buy Supreme Industries with a stop loss at Rs 4,300 for targets of Rs 4,440, Rs 4,500 and Rs 4,600

• Results came during market hours on Friday 
• Stock may run due to strong internal

Buy AU Small Finance Bank futures with a stop loss at Rs 592 for targets of Rs 616, Rs 624 and Rs 638

• RBI issues guidelines to convert the small finance bank into a full service bank; this is a big positive

Buy Jana Small Finance Bank shares with a stop loss at Rs 500 for targets of Rs 520 and Rs 529

Buy Shakti Pumps shares with a stop loss at Rs 1,765 for targets of Rs 1,845, Rs 1,890 and Rs 1,940

• Results very strong 

Catch the latest  stock market updates  here. For all other news related to business, politics, tech and auto, visit  Zeebiz.com .

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April Market Update: Available Now

This month's update covers a range of current economic issues, including the path of inflation and the importance of market fundamentals.

Secure Business Operations With Bank Fraud Prevention Tools

Fraud is a consistent threat to businesses. Data from the Association for Finance Professionals shows two-thirds of businesses experience payment fraud attacks or attempts. Lax controls and poor fraud prevention strategies leave organizations vulnerable, impacting finances, business operations and reputation.

Being a victim of fraud is more than a time-consuming and frustrating process. It can lead to long-term strategic setbacks, hampering growth. Developing a fraud prevention strategy centered around identifying and mitigating risk can help deter fraudsters and maintain operational continuity. Here's why it matters and how to start.

Fraud is an evolving threat

Digital payments and communication create new vulnerabilities for exploitation. Sophisticated attacks involving payment fraud, AI -enabled deepfakes and impersonation and business email compromise are increasingly common. And the rise of remote work has opened even more opportunities.

Recent research indicates that 71% of companies reported being victims of payment fraud through email and 44% were unable to recover the funds. As more organizations become victims of fraud, regulators are expected to tighten standards to address escalating cybersecurity risks . Victims of attacks may face additional scrutiny evaluating the protective measures in place.

Incidents may erode customer loyalty and trust, disrupt operations, and threaten revenue streams, leading to reputational damage. Implementing a proactive, multilayered fraud prevention and fraud detection strategy can become a competitive advantage, mitigating risk while building long-term value.

Take a collaborative approach to fraud prevention

As fraud continues to escalate, traditional prevention methods may not meet evolving threats. Of course, strong internal controls within the business are crucial, but you may struggle to navigate changing tactics without help from outside experts.

A collaborative approach with your banking partner can provide additional benefits, allowing you to:

• Leverage innovative fraud detection and prevention tools to help safeguard accounts from unauthorized transactions and cyber threats
• Receive expert guidance and strategies customized to your business needs and risk profile versus a one-size-fits-all solution
• Minimize the risk of disruptions caused by fraudulent activities to ensure operations run smoothly without setbacks during the loss and recovery processes
• Adhere to regulatory requirements to reduce the risk of legal penalties and improve customer confidence in your business practices
• Protect the business's reputation with customers and vendors, building long-term trust in your brand while demonstrating you take security seriously
• Follow a structured and fast-acting response plan, minimizing financial and operational impact while enabling faster recovery

These underscore the importance of accessing external expertise and advanced solutions designed to defend against risks that internal measures may not catch.

Integrate advanced fraud protection tools

Fraud prevention services help businesses detect and prevent risky activities that may threaten your finances. In addition, you'll have access to premium security measures without the burden of developing and implementing sophisticated fraud prevention technology in-house. 

These advanced protection tools counteract, anticipate and neutralize fraud before it strikes.

• Positive pay services:  Positive pay cross-verifies checks and electronic debits presented for payment against the transactions issued by your company. Discrepancies are flagged for review, preventing unauthorized transactions. 
• ACH debit blocks and filters :   ACH blocks allow control over who is initiating payments from accounts, validating legitimate ones and blocking bad actors.
• Check services: This service examines each check and compares against an electronic file you submit.
• Post no debits accounts:  Banks won't allow withdrawals or payments in these accounts without prior authorization, similar to products like UPIC adding an extra layer of security to protect funds.
• Transaction alerts:  Banks send notifications to inform you of various activities on your accounts, and they can be set up for a range of transactions, allowing for customized monitoring. 
• Online banking security features:  Banks offer advanced security measures, such as multi-factor authentication and encryption, to secure transactions. 

Cybercriminals continuously refine their techniques, exploiting vulnerability to commit fraud. This reality makes it critical for businesses to prioritize fraud prevention and find a partner that offers reliable solutions to detect and prevent unauthorized transactions. 

Create a fraud prevention strategy

Building a documented action plan provides another layer of protection. It starts with implementing strong internal controls. These are the main defense against risk. Consider daily account reconciliation, regular account reviews, strict financial protocols and dual-control systems. This helps decentralize financial authority and prevent any single employee from controlling every element of a transaction.

Employee education is also vital, including at the executive level. Regular training sessions help staff recognize and report fraudulent activity. Also, review hiring practices—background checks may reduce the risk of internal fraud.

For payments, minimize paper checks to reduce fraud risk and maintain separate accounts for check and digital payments. If you must write checks, use those with advanced security features, keep them stored securely and deliver them directly to the post office. 

Finally, establish a fraud response plan detailing your strategy for suspected or detected fraud. It should outline steps for fraud detection, initial response, investigation, communication, recovery and legal action if necessary.

Don't navigate fraud alone

The stakes are higher than ever. With diverse attack methods, fraudsters can exploit digital and traditional vulnerabilities to steal funds, disrupt operations and damage your organization's reputation.

Taking a proactive approach to fraud prevention isn't just a defensive measure—it's a strategic business decision. Integrating comprehensive fraud prevention strategies can help safeguard your businesses.

With the right measures in place, you can significantly mitigate the risk of fraud and stay ahead of potential threats.

In the fight against fraud, you're not alone

Contact our dedicated team of banking experts to explore smart solutions for fraud prevention services.

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Trump allies are drawing up plans to make the Fed less independent, report says

• Allies of former president Trump are drafting plans to chip away at the independence of the Fed, The Wall Street Journal reported.
• Trump has not publicly acknowledged the plan, but sources said it has his blessing.
• The plan also suggests Trump could fire Jerome Powell before his term ends in 2026. 

Donald Trump's allies have secretly mapped out a plan to give the Republican candidate more control over the Federal Reserve if he wins a second term, a move that would chip away at the long-standing independence of the US central bank, The Wall Street Journal reported Thursday. 

A group of the former president's associates and supporters have been busy in recent months drafting a 10-page manifesto plotting policy shifts and suggesting that the presidential candidate should have a say in the interest-rate setting process, a suggestion that even caught some of Trump's former economic advisors off guard, sources told the Journal. 

Sources said the group also thinks the Treasury Department should have more power to keep an eye on the Fed, and if Donald Trump takes office again, he would be able to fire Jerome Powell as Fed chair even before Powell's term is up in 2026. 

Related stories

The former president handpicked Powell to lead the US central bank in 2017, but he has since publicly lambasted the central bank chief. In February, Trump slammed Powell and accused him of trying to help President Joe Biden win reelection in November by turning dovish on monetary policy. 

Though Trump hasn't acknowledged the plan publicly, sources told the Journal they reckon the plan has his blessing, with his senior advisors clarifying that the plan shouldn't be treated as official unless Trump says so directly. 

The Journal said Trump has expressed his desire for easing monetary policy and his frustration for not being able to impact it while he was in office. He also led casual discussions with his advisors and associates about potential candidates to take over as the head of the central bank. 

The idea of making the Fed less independent has faced backlash, even from former Trump administration officials.

Republican Senator Kevin Cramer told the Journal that maintaining the central bank's independence in setting policy is "critical to doing it in an unbiased, nonpolitical way," adding that he'd oppose any attempts to hurt the Fed's autonomy. 

Watch: Meet the Republicans who are Trump's likely successors

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