Johnson Financial Group I Operations, Digital & Technology

Lowering a bank efficiency ratio by 12 percentage points with data-driven solutions for Johnson Financial Group

What We Did

Leadership at Johnson Financial Group, a financial services company offering bank, wealth, and insurance, knew efficiency ratio improvement was critical. Expenses were running too high and they didn’t have the right data to effect meaningful change within the organization. With an emphasis on their banking business, JFG enlisted West Monroe’s help to:

Collect activity-level data throughout the bank to understand where time is being spent
Identify areas of opportunity by isolating pain points and investigating areas of excess effort
Create data-driven, actionable solutions that boost efficiency and lower efficiency ratio

12%

delivered a financial model that reduces the efficiency ratio from 67% to 55%

82%

identified millions in expense reductions, 82% of which recur annually

164

roles analyzed

The Challenge

Compared to the traditional industry benchmark of a 50% efficiency ratio, JFG's expenses were too high for the revenue it brought in – resulting in a bank efficiency ratio of 67%. Yet the firm did not have the necessary analytics to pinpoint the inefficiencies, making it difficult to initiate major changes, especially after previous attempts to introduce digital capabilities did not return the expected benefits.

JFG enlisted West Monroe to develop a data-driven solution to pinpoint problems and develop plans to improve efficiency with digital enhancements.

An Undeniable Approach

West Monroe’s multidisciplinary team – drawing on finance, operations, digital, and customer experience expertise – took a unique approach, adopting JFG’s efficiency ratio as the bedrock of their efforts. By building a roadmap around this critical metric, we ensured our work would be focused and tied to concrete, measurable results.

The team captured activity-level data using West Monroe Intellio® Insights tool to model the full state of JFG’s operations by role and activity, as well as the impact different initiatives – like technology implementations or process improvements – could have on the company's efficiency ratio.

To enhance our own methodology and capture activity-level data faster and with less impact on the employees we piloted a partnership approach with Zeitworks, a Seattle based startup company that uses data collected through desktop sensors to provide valuable insights through their intelligent operations platform. Zeitworks not only provides the data faster, it also uses machine learning processing to deliver real-time performance metrics, complete workflow analytics, and automatically generated process maps.

The team then combined this data with a benchmark analysis, comparing JFG to industry leaders in efficiency using financial, operational, staffing, productivity, and customer use metrics.

Returns You Can Measure

West Monroe identified and modeled a reduction in annual expenses, that will lower JFG’s efficiency ratio from 67% to 55%– without any concurrent revenue increases.

Our team also provided JFG with the data its leadership needs to make informed decisions about reducing inefficiencies. The JFG team is now working with West Monroe to activate identified solutions and leverage this data to measure its effect at lowering efficiency ratio.