Financial Services

Our perspective

Most financial service companies have significant untapped value potential. While the nature of the opportunity will differ by institution, there are common practices that contribute to the gap between actual value and potential value. Examples of these include:

Participation choices informed too much by market size and growth, and not enough by competitive advantage and sources of difference
Strong focus on the customer (e.g., cross sell, retention) but not enough focus on delivering more customer value (e.g., tailored customer offers with high willingness-to-pay relative to cost)
M&A used as a lever for growth, but leaving a lot of untapped value creation by not integrating economics with strategy upfront
Priorities overly influenced by what others are doing vs. what is highest value for your company
Goals, measures and rewards not aligned with value creation across the organization

Central to unlocking value is the ability to understand and manage economic tensions and tradeoffs - growth vs. returns; short-term vs. long- term; returns vs risk.

How we can help

At Marakon, our advice is rooted in the discipline of value and combined with deep industry expertise. We work with our clients to identify where their value potential lies and to help them achieve their potential by better managing choices and trade-offs. In addressing specific issues, we bring together strategy and economics, making clear the linkage between strategic choices and economic outcomes.

Economics are at the heart of financial services and are at the heart of our practice and DNA. We help financial service institutions re-think organic and inorganic strategy, capital allocation, commercial and go-to-market models, and organizational structures and people / talent agendas – all rooted in the economic discipline of value creation.

We deliver both results and capabilities—never one without the other. Clients value us for our ability to help them achieve their ambition for sustainable value growth through better strategies, stronger organizational capabilities, and more confident and effective leadership.

Areas of expertise

Corporate strategy

M&A and Divestitures
Portfolio Strategy
Financial Resource Allocation and Risk Management
Corporate and Balance Sheet Transformation

Business unit strategy

Competitive Strategy
Customer and Product Proposition Design and Launch
Customer Segmentation / Channel Management

Organizational effectiveness

Performance Management (Goals, Measures and Rewards)
Organizational Design

BankVQ powered analytics and insights

For US Banks only
Learn more about BankVQ

Areas served in financial services

We serve clients with needs across banking, insurance, payments and wealth management. We also work on needs and issues that cut across segments (e.g. retirement solutions, small business solutions, integrated customer balance sheet solutions).

Learn more about our engagements.

Banking

Retail (incl. mortgage and credit cards)
Corporate / commercial
Consumer finance
Small Business / community
Investment banking and capital markets

Insurance

Consumer life & annuity
Consumer P&C
Commercial P&C
Health
Payment
Reinsurance

Payments

Card & card networks
Merchant services
Treasury services
Trade settlement & clearance

Wealth management

Wealth
Asset management
Private client
Retirement (wealth accumulation and drawdown)

Responding to a Rapidly Changing ESG Policy Landscape

The Biden administration has signaled a strong desire to make environmental, social, and governance (ESG) considerations more central themes in government policy, corporate disclosure, and investor and corporate behavior. Policies directed at addressing climate change get the most attention, but we expect significant policy shifts across all areas of ESG. These shifts will not only change disclosure requirements, but may fundamentally affect the economics of certain value chains, capital-labor relationships, and the legal risks of corporates. As a result, US corporates need to step up their ESG orientation. One place to start is a simple set of questions management teams can ask themselves to better understand how prepared they are for the expected policy shift.

Beyond ESG: Building more confidence and assurance in corporate sustainability practices

Sustainability and ESG are the buzzwords of the day, and indeed much progress has been made to bring transparency and focus onto these issues in the business world. As capability and sophistication in this space evolve, many companies and investors are understanding the need to move beyond using relatively simple, sometimes self-reported ESG scores to build more confidence and assurance in corporate sustainability strategies and policies. Charles River Associates, via Marakon and its Investigations practice provides an effective supporting capability that enables corporates and investors to do just that.

5 Lasting Changes CEOs Need to Be Planning For

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Strategic Resource Management - The Hidden Secret to Outperformance

Solid operational performance matters; if your team can’t reliably execute you’re finished. However, our comprehensive study of 1,200 companies revealed that the path to superior performance is determined by management’s decisions about where to focus the firm’s strategic resources (time, people and capital). At least 60–75% of the difference in performance can be attributed to high-level portfolio choices. The implications for senior management are stark and the report outlines the common challenges they face and six actions they can take to help ensure outperformance is within their grasp.

Making Elephants Dance: Enabling Agile in Large Corporate

Agile techniques are increasingly used to alter the DNA of large corporates. However, the agile elephant remains an elusive beast; to date many large corporates have used agile working practices to improve efficiency and effectiveness of operations, but until decision-making processes, standards and culture are rewired from the boardroom down, the full benefits of agile will not be realised.

Sales Force Effectiveness - How to Balance Customer Centricity and Shareholder Value

In this paper, we identify five common organizational tendencies that can reduce sales force effectiveness and upset the balance between customer and shareholder value. We also provide observations on what makes an effective, customer-centric sales performance system as well as its benefits, challenges, and avoidable pitfalls.

Winning with Digital in Consumer Financial Services

Lessons from Leaders and Laggards

The Effective Chief Strategy Officer

In this article we discuss the six important aspects to help chief strategy officers, strategy directors, chiefs of staff, etc., to be impactful in their role. This article will also help chief executives better understand who they want in the job, what their remit should be, and how to get the most out of them.

The Where or The How - New Evidence on the Link Between Portfolio Decisions and Performance

What is more important – where you compete or how you compete – portfolio or operations? Marakon finds evidence that portfolio matters more, and in some industries explains up to 65% of performance. Executives should give portfolio decisions the attention they deserve.

The Digital Wealth Management Imperative

Following the financial crisis, there is a wave of new startups that are trying to redefine or refresh traditional models of wealth management. Their services are priced to sell, and traditional firms have not been able to deliver the quality of customer experience of these startups. While some startups have been able to grow to a modest level relatively quickly, the question is whether they will be able to sustain this rapid pace of growth, and what more can traditional players do.

What Really Just Happened to the Future of Traditional UK Life Insurance Companies?

Four ways to help insurance companies thrive in the new paradigm.

Economic Profit Growth

Almost 35 years ago, Marakon pioneered the Economic Profit metric and linked it to a new strategic framework for managing the value of an enterprise.

Building the Organizational Capabilities to Achieve Sustainable Organic Growth

Achieving sustainable and profitable organic growth requires more than new ideas, innovation, and strong execution. Rather, organic growth exemplars embed a set of institutional capabilities and a growth culture that define the organization and that are key enablers to realizing advantaged performance.

Structure Is Strategy — Gaining Strategic Advantage Through Organizational Design

Conventional wisdom suggests that it is critically important to decide the enterprise strategy first and then re-align the organization to deliver on it. Reality is quite different.

Conserve, Capture, Create Value

Mergers and acquisitions do not have to destroy shareholder wealth, despite evidence to the contrary.

Are Acquisition Multiples Too High?

Companies should not think about acquisitions in terms of pre-deal multiples, but through analysis of fundamentals. This in turn will create better post-deal strategies.

Economics of Breakups - Conglomerate Discounts and Premiums

Top diversified companies command premium multiples and outperform their pure-play peers through overcoming four distinct disadvantages that diversified companies have vs. pure-plays.

HBR: Managing the Right Tension

There are three fundamental tensions with which most companies and executives struggle: profitability versus growth, short term versus long term, and the whole of a company versus its parts. Few companies manage these competing objectives successfully at the same time. But there is a way to do so. The key is finding the common bond that enables reconciliation of these seemingly irreconcilable objectives. For any company one tension is always more critical to unlocking better performance than the rest—that is the one to manage.

HBR: Turning Great Strategy into Great Performance

Companies typically realize 60% of their strategies' potential value due to defects and breakdowns in planning and execution. By following 7 simple rules you can get a lot more