Designing for the Future: A New Operating Model for a Traditional Bank’s Digital Transformation

Challenge: A Siloed Organization Inhibiting Innovation and Digital Growth
Solution: Designing and Implementing a Product-Centric, Agile Operating Model
Results: 40% Faster Time-to-Market, 3x Increase in Digital Engagement, and a 20% Rise in Digital Revenue

Introduction

Digital transformation is more than technology—it’s about organizing people to work in new ways. This case study examines how we helped a large, traditional retail bank completely redesign its organization from a functional silo structure to a product-centric, agile model to compete with fintechs and digital challengers.

Client Background

• Sector: Retail Banking

• Profile: 100-year-old bank with a strong brand but legacy structures.

• Primary Challenge: The bank’s digital initiatives were slow, expensive, and failed to meet customer needs. The organational structure—divided into retail, commercial, IT, and marketing—created friction, slow decision-making, and a lack of customer-centricity.

The Core Challenges

1. Slow Innovation: It took 18+ months to launch a new digital product feature.

2. Internal Silos: Digital, marketing, and product teams reported through different hierarchies with conflicting goals.

3. Lack of Accountability: No single owner was accountable for the end-to-end success of a digital product like the mobile app.

4. Skills Gap: The workforce was skilled in traditional banking but lacked agile, product management, and UX capabilities.

Our Approach: Redesigning the Operating Model

Phase 1: Current State Assessment & Design Principles

• Conducted interviews and workshops to map decision rights, workflows, and pain points.

• Defined design principles for the new model: customer-obsessed, empowered teams, and rapid iteration.

Phase 2: Target Operating Model Design

1. Shift from Functions to Product Streams: Dissolved the centralized digital department and organized around value streams (e.g., “Mortgage Journey,” “Payments Platform,” “Mobile App”).

2. Formed Cross-Functional “Squads”: Each product stream was staffed with a dedicated, empowered squad containing product management, design, engineering, and marketing expertise.

3. Redefined Governance: Implemented a new lightweight governance model with quarterly business reviews (QBRs) instead of monthly budget approvals, giving squads autonomy.

4. New Talent Strategy: Launched an upskilling program in agile and product management and targeted key hires from the tech sector.

Phase 3: Phased Implementation & Change Management

• Piloted the new model with two high-priority product streams first.

• Ran extensive change management communications to explain the “why” and provide support.

Quantifiable Results Achieved

Conclusion

This engagement demonstrates that structure dictates behavior. To truly transform, companies must align their organizational design with their strategic ambitions, breaking down silos to create empowered, customer-focused teams.

Is Your Organization Holding You Back?

📩 Contact our Organization Strategy practice to design an operating model for growth.