Operating model and cost improvement in a UK retail bank

A UK digital bank serving individual customers, with several million customers, had grown quickly through product launches and acquisitions. The operating model had become fragmented. Different parts of the bank were running their own change portfolios and service functions, supported by separate data teams. Cost pressure was increasing and programme spend was hard to relate back to the strategy. These are familiar themes in UK financial services, where banks have used transformation to respond to regulation and increased digital competition in a context of margin pressure.

The bank’s leadership team saw three issues:

• The strategy called for a bank that was simpler to run and simpler for customers to use, but the operating model had not been updated in line with this.
• Change activity was spread across more than 70 initiatives, many of which competed for the same people and technology capacity.
• Service and operations costs were rising faster than income, even as digital volumes grew.

Internally, there was recognition that the bank needed clearer ownership for key customer journeys and stronger alignment across central functions, with the portfolio managed in a more disciplined way.

Ozkora was asked to help the bank design a target operating model and reset the change portfolio. Over eight months we:

• Ran a structured diagnostic to understand how decisions and money moved through the bank and how work was organised, using interviews and existing data. This kind of diagnostic is a common first step in operating model work at other major consultancies.
• Worked with the executive team to define a small number of accountability anchors for the operating model, centred on customer journeys and products, with shared capabilities identified separately.
• Developed and tested operating model options for key areas: digital, operations, data, risk and change.
• Helped the bank consolidate its portfolio, moving from more than 70 initiatives to a smaller set of programmes aligned to the new operating model.
• Supported the design of a central change function with clearer roles for business ownership, technology, finance and risk.

Within the first year after implementation, the bank reported that:

• Operations and central function costs were reduced by just under 9% year‑on‑year, against a target of 8%, through a mix of process simplification and removal of duplicate work. Savings in this range are consistent with published cost‑reduction case studies in UK retail and public bodies.
• The change portfolio was reduced by about one third, with funding and leadership attention reallocated to a smaller number of priority programmes.
• Time to approve and mobilise major change initiatives fell from several months to weeks in many cases, due to clearer governance and a standard way of moving from idea to delivery.
• Internal survey data from senior leaders showed increased confidence in the bank’s ability to execute its strategy.

Ozkora’s role ended with the bank having a clear operating model, a focused portfolio and internal teams in place to run the next phase without external day‑to‑day support.