Building for unknown future residents

The unknown future state is the fundamental challenge. If what you're doing now is trying to get your data ecosystem right, but the things that will determine whether it is right are things that won’t emerge for 10 years, how do you proceed?

By its nature, the process of transformation never ends, because markets continue to evolve. Wherever a bank is heading in the coming year, its priorities will inevitably change over the next 3 to 5 years. That level of strategic volatility calls for keeping transformation dynamic so that building for today’s priorities can also support tomorrow’s changes.

Three layers of infrastructure

Transformation officers and the programs they lead need to address three levels of infrastructure: technology, data, and operations. These three interconnected layers must work in concert.

The technology layer involves rationalizing massive numbers of systems into unified platforms while embracing cloud as critical infrastructure. Banks must decide what to keep from their mosaic of legacy technologies and what to replace with systems that can handle both traditional and digital assets. The challenge is taking a unified approach to serve multiple asset classes rather than perpetuating unique solutions for each. These decisions become the foundational infrastructure that everything else will run on.

The next layer is the data ecosystem. All the source systems produce and egress data, but there's no normalization of that data. By addressing those challenges in the data ecosystem, banks accomplish three things. They buy themselves time. They increase ROI from the underlying technologies. And they hedge their bets for future opportunities. For example, with healthy data, they can more easily replace a trading system by remapping the data versus addressing every other use case and integration.

Finally, the operational layer is already experiencing revolution. The reality of 2025 is that AI has created a tidal wave of change in operations within banks. It's filtering into every single function, creating efficiencies, handling reconciliations and exception reports, and accelerating settlement cycles with a speed and efficacy that is bowling people over.

The recipe for success or failure

The recipe for success is to have a plan with buy-in from senior management, all your business units, and your technology teams. That plan must ensure it's not a single layer but instead an integrated view of processes. Planning for change at all three layers of infrastructure means that transformation affects not only infrastructure but capability.

Success also depends on governance and alignment at the very top. Transformation fails when there's not a top-down mandate. Elevating transformation to the C-suite doesn’t solve the challenges unless banks integrate it across their entire organizational vision.

There are still many institutions where senior leadership is focused on their asset class and clients, making them slow to adopt new technologies. The result is that transformation stumbles over blockers, such as a business unit that keeps its technology because it still generates bottom-line value, or a technology team that insists on building something in-house when a better business case is to buy.

Pragmatic planning

Transformation success depends less on any one successful implementation or initiative and more on whether it allows a bank to pivot at any given point in time, given an evolution in technology, regulation, and market dynamics. The pragmatic view is to continue working on initiatives planned for the immediate future while remaining ready for change. If they can achieve 90% of their goals today, they know there will be another set of challenges in the next few years (or sometimes, months).

By creating robust, common underlying utilities — data, technology, operations — they can continually evolve the city to support whatever complex jobs and commerce the future brings. As BCG has estimated, putting a transformation office in place can improve value creation by up to 50%.^iv The cities that thrive will be those that create systems capable of evolving with their ever-changing residents, even the ones who haven't arrived yet.