Managing disruption with change management
Banks in 2025 are confronting a convergence of challenges – decline of some traditional revenue streams, embedded finance challenges, increasing regulatory scrutiny and shifting customer expectations. Trying to deal with and manages these challenges requires banks to be in a cycle of continuous transformation. And successful transformation hinges on having a change management approach that continually aligns people, processes and technology to ensure banks are able to meet these challenges and do so in a resilient way.
Banks are running complex portfolios of change initiatives to respond to this range of challenges, all of which require banks to be highly aware of and responsive to change. Most banks are engaged in transformation initiatives that are in part responding to the following:
Revenue model shifts: banks are seeing challenges in terms of how they have traditionally delivered revenue. Fintech disruptors and regulatory changes are continuously targeting traditional bank income sources across margin-based and fee-based services. For example, digital banks’ ability to rapidly deliver innovative new services has led to a rapid rise in the number of customers leveraging new banking relationships. The strong user experiences these digital banks create will build loyalty as they continue to expand their product offerings. Similarly, companies like Modulr have enabled businesses and consumers to conduct seamless, cost-effective transactions without relying on conventional banking channels, providing new choices for bank customers.
Regulatory & AI scrutiny: new laws, such as the EU’s AI Act, demand transparency in AI-driven decisions, creating compliance and operational hurdles in a rapidly evolving environment. For example, a ‘high-risk’ classification will apply to many AI systems used in lending decisions, fraud detection, or credit scoring, demanding a high level of explainability that some traditional product delivery approaches may struggle to comply with.
Embedded Finance is when financial services (like payments, loans, insurance, or bank accounts) are built directly into non-financial platforms or apps.
Embedded finance & Banking as a Service (BaaS): to support changing customer demands, banks must integrate their services into third-party platforms while maintaining regulatory compliance and customer trust. Banking-as-a-Service allows non-banks (like fintech’s, retailers, or platforms) to offer banking products to their customers by connecting their services to licensed banks. User experience benefits from these close integrations with third party applications but this additional complexity drives challenges in providing robust, secure and flexible services.
Customer expectations for personalisation: customer demand for hyper-personalised banking experiences like tailored product recommendations and offers and fine-tuned customer service is growing. Increasingly, the ability to remain competitive relies on a bank’s ability to ship technology developments and deliver seamless omnichannel engagement.
But how can banks ensure their existing change management frameworks are fit for purpose to deal with these portfolios of change and large-scale transformation programmes?
Assessing your change management strategy
1. Agile goes beyond IT
Traditional frameworks and approaches for managing change can be slow, rigid and disconnected, which can limit the ability to respond to and manage challenges like those outlined above. Becoming more agile is the direction of travel, but what does that really mean?
To become truly agile, banks must shift their whole change approach to lean portfolio management (LPM) and value stream-based execution, to ensure that their strategy and delivery are fully aligned while enabling decentralised decision-making. Being truly agile, involves completely different structures and approaches to delivering change that involves all areas of the bank.
LPM is an agile governance approach that aligns strategy with execution by funding value streams instead of individual projects. This enables banks to prioritise and adapt their initiatives dynamically, rather than committing to rigid, long-term project roadmaps.
Instead of pre-allocating budgets to fixed projects, agile banks fund adaptable value streams that aim to continuously deliver outcomes, which is particularly pertinent given those outcomes are often changeable.
The role of senior leadership’s role is to set the strategic direction, but execution teams need to have the autonomy to adjust priorities based on the real-time needs of the business. Responsiveness is driven by quarterly or monthly planning cycles that build in constant review opportunities rather than being locked into the constraints of budgets that are set annually.
a value stream is the set of steps a company follows to deliver something useful to customers – like a product or service – from idea to delivery.
2. Is your bank truly agile or mired in bureaucracy?
Agility is not just about implementing new processes – it’s about shifting the culture, structure, and mindset of the organisation to operate with speed, adaptability and resilience in a banking landscape that is continually evolving. The same challenges can feel very different for executives depending on how the organisation is aligned.
Executives in organisations that fail to effectively adopt agile often report they feel stuck in the same slow, bureaucratic processes and are frustrated at the organisations ability to capitalise on opportunities or respond to challenges.
On the other hand, executives in agile organisations don’t feel like they are constantly fighting against their own organisation to get things done – decisions are faster, teams are empowered and they can respond swiftly to market shifts.
Some of the factors that can indicate the agility level of an organisation are outlined below:
| Aspect | Struggling with agile | Truly agile bank |
| Decision making | Slow, centralised, approval-heavy | Fast, decentralised, data-driven |
| Funding & strategy | Locked in annual project-based budgets | Dynamic, rolling quarterly funding |
| Cross team collaboration | Siloed IT, risk, compliance and product | Cross-functional value streams |
| Speed to market | New products take 12-24 months | Minimum Viable Products can be launched in 6-12 weeks |
| Customer centricity | Customer feedback collected post-launch | Continuous customer-driven iteration |
| AI & digital transformation | AI adoption is slow, underutilised | AI and automation integrated into workflows |
| Employee experience | Agile fatigue, leadership resistance, slow adoption | Empowered teams, engaged employees, strong execution |
3. Agile assessment – identifying bottlenecks
There is plenty of anecdotal evidence to support why becoming a truly agile bank is beneficial. So why are so many banks still struggling to achieve agility?
Many banks believe they are agile because they’ve adopted agile practices (e.g. sprints, stand-ups, SAFe), but in reality, decision-making is still slow, governance is rigid and teams operate in silos. One of the first steps to becoming more agile is understanding where the current bottlenecks are. Banks should conduct an agility audit across key areas of the business that are typically bottlenecks to becoming more agile.
- Assess decision-making speed – how long does it take to approve new products or process changes? Where is the most time lost? Is there significant variability? Why?
- Review funding mechanisms – are budgets locked into rigid, annual cycles, or do they allow real-time reallocation? What is restricting more responsive funding mechanisms?
- Map cross-functional collaboration – are risk, compliance and product teams working together from the start, or do they still operate in silos? Why are they siloed?
- Measure customer-centricity – is customer feedback continuously integrated into product development? What is preventing better customer feedback mechanisms?
Common bottlenecks like these are not to do with an outright inability to set up the right structures to become more agile. Success comes from the banks’ willingness to challenge the current approaches to change and adopt a new mindset.
4. Becoming more agile
True agility requires a shift in mindset and being able to embed continuous change mechanisms within the bank’s DNA. These practices and methodologies need to become an inherent part of the culture. Bank executives should ensure they focus on some key areas:
- Upskill teams: it is important to equip all employees with agile principles, foster a culture of learning and embed digital fluency across all levels. This includes technical training, leadership coaching and fostering cross-functional collaboration.
- Embed adaptive governance: banks need to move beyond rigid policies to a more adaptive, outcome-based governance approach – like lean portfolio management – that enables flexibility while allowing banks to maintain regulatory integrity. By replacing annual cycles with rolling quarterly reviews, banks can better respond to market demands and emerging risks.
- Focus on technology enablement: banks can harness technologies like AI, automation and advanced analytics to help them with real-time decision-making and improved risk management. AI-driven insights should be integrated into daily operations and automation should be used to streamline compliance and operational processes. Banks must also improve their ability to collect, interpret and act on customer and market data in an agile manner.
- Drive stakeholder alignment: banks need to bring together cross-functional teams that facilitate dialogue across regulators, customers and employees to ensure shared ownership of transformation efforts. This also means redefining their leadership roles to support rather than dictate change, which will empower decision-makers at all levels.
- Support cultural transformation: another priority is to move from a risk-averse mindset to a culture that embraces experimentation, innovation and continuous improvement. Encouraging cross-team transparency, open feedback loops and a fail-fast mentality will enable agility across the organisation. Banks should establish dedicated innovation hubs or teams responsible for experimenting with new technologies, products, and customer experiences. Encouraging innovation as an ongoing, embedded practice rather than a periodic initiative ensures long-term adaptability and market leadership.
Conclusion: next gen change management
To remain competitive in a banking environment that is constantly evolving and facing different challenges, banks must continuously review and evolve their change management approach, embed best practices and commit to becoming more agile.
Banks need to ensure leadership is structured appropriately, they need to put in place the facility to monitor performance and they need to be able to audit and test their agility. And they also need to equip and train employees, track customer experience and reinforce these principles around revised change approaches. By putting these measures in place to develop an agile change management philosophy, banks can continue to thrive amid the continued challenges they face.
Is your bank’s change framework ready for 2025 and beyond? Valcon can help assess, refine, and optimise your framework for success. Alex Robertson – Technology Transformation at Valcon [email protected]
