10 Steps for Building an Effective Business Plan for Your Bank

Some people get confused about where business plans end and strategic plans begin — which may explain why some banks have failed to master the art of business planning. Here's a checklist to help you craft an effective plan that gives your bank an edge in achieving its goals.

As many as 64% of retail banking executives and 56% of commercial banking executives are focused on “improving the customer journey” as a top priority during the next five years, according to a CCG Insights survey.

These findings underscore the fact that both retail and commercial bankers recognize the need to provide an elegant customer experience, whether it’s online or in the branch. The high percentages also serve as an indication of how intensely competitive the banking landscape is and will remain for years to come.

But the level of coordination and focus needed to achieve enterprisewide goals like those associated with customer experience does not just fall into place. It requires that banks incorporate effective business planning — with agreed-upon objectives and target dates — into their day-to-day operations.

A Business Plan vs. a Strategic Plan

Sometimes banking executives have a misconception about what a business plan actually is — which can undermine success.

A business plan should not be confused with a strategic plan. Strategic plans identify aspirational targets and itemize strategies to reach them. Business plans spell out exactly where the bank expects to be one year on and how it will get there.

Strategic plans should not have numbers; business plans should be full of numbers.

Don't Mix Up the Two:

Some executives make the mistake of conflating business plans with strategic plans. Strategic plans should not have numbers; business plans should be full of numbers.

Is your bank expecting to implement a new core solution for 2025? Do you plan to increase demand deposits by 10%? Or target a return on assets of 1.45%? The business plan should not only identify those goals, but drive an action plan to achieve them.

When executives try to use a strategic plan in place of business plan, they often fail to gain traction across the organization. Then they end up not being able to execute in a meaningful way.

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A Checklist for Creating Your Bank’s Business Plan

Here are 10 steps for building an annual business plan that has consensus, is effective, and aligns with your bank’s long-term goals.

1. Define Clear Objectives

Before committing to a business plan, it’s essential to define the objectives. What does your bank want to achieve? Are you looking to enhance profitability? Improve customer satisfaction? Expand into new markets? Address specific operational challenges? Answers to these questions can help ensure objectives are clearly defined.

2. Assemble a Diverse Team

Gather a cross-functional team made up of stakeholders that represent various departments within your bank, including executives, managers, and frontline staff. A diverse team brings different perspectives and insights to the business planning process.

3. Review Your Bank’s Current Business Plan

Next, thoroughly examine your existing business plan. Evaluate its strengths and weaknesses, identifying any gaps between the business plan and your long-term goals. This will set the stage for future enhancements.

4. Analyze Market and Industry Trends

Remaining competitive starts long before putting a plan on paper. All stakeholders must stay informed about the latest market and industry trends, including regulatory changes, technological advances, and consumer preferences. Understanding these factors and using them to inform the business planning process are crucial.

5. SWOT Analysis

Be sure to include a SWOT analysis that takes into account both internal and external strengths, weaknesses, opportunities and threats. Doing so provides your team with a comprehensive view of the bank’s current position while identifying areas for improvement and potential growth opportunities.


6. Gather and Analyze Customer Feedback

Listen to your customers. Collect feedback through surveys, focus groups, and other channels to fully understand their needs, preferences and pain points. Customer insights are invaluable for shaping your planning.

7. Financial Assessment

Evaluate your bank’s financial performance, including key metrics such as profitability, liquidity, and asset quality. Determine how well your current plan aligns with your financial goals and identify areas for improvement.

8. Bank Technology Assessment

Does your technological infrastructure align with the bank’s goals? Is it helping to enhance efficiency, security and customer experience? If not, identify gaps in your current tech stack that need attention.

9. Risk Assessment

Analyze your bank’s risk profile. Identify potential risks and vulnerabilities and develop strategies to mitigate them. Effective risk management is critical for long-term strategic goals.

10. Develop an Action Plan

Create a comprehensive action plan. Prioritize initiatives, set realistic timelines, and allocate resources accordingly. Ensure that the plan aligns with your bank’s overarching goals and objectives.

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The Advantages of a Business Plan

There is no single “correct” planning methodology that works for everyone. There is no “right” or “wrong” way to go. There are, however, methodologies, practices and techniques that are more likely to contribute to overall success in meeting long-term objectives.

By assessing and refining your business plan, you are ensuring your bank is positioned for long-term success. Stakeholders in your organization will understand your current position, recognize opportunities for improvement, and clearly understand the overall objectives. But remember, a business plan is not a one-and-done endeavor; the plan should evolve with the changing market conditions.

Once you’ve mastered crafting an annual business plan, your bank will be better positioned to navigate the challenges and opportunities ahead.

About the author:

Tiana Brown has worked in the financial services sector for nearly 15 years, including serving in a variety of roles with Bank of America and Wells Fargo. She is currently the chief operating officer for CCG Catalyst Consulting Group.

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