Financial Services Planning and Budgeting: Get in Gear for the Next Year

Financial Services Planning and Budgeting: Get in Gear for the Next Year

November 29, 2019
Sharanya Venkatesh

Are you still in the middle of your planning and budgeting for next year? Don’t panic. We have pulled together top tips for financial services planning and budgeting. ‘Tis the season not only for holiday cheer but also for pressure on planning ahead for the next year. Planning will set you up in order to start the new year off strong.

Some financial services companies may begin their planning and budgeting activities as early as Q3. Others begin with a few weeks left until the holidays.

If you’re in the latter group, here are the top 5 best practice tips to guide your planning and budgeting activities:

1. Start with Your Organization’s Goals

When it comes to financial services planning and budgeting, it is easy to over-complicate the process. You may find that you are planning for several contingencies and taking several factors into consideration.

Before you do this, you have to take a step back and analyze how many of these factors actually fit with your business goals. You need to be able to pare down to the basics and focus on the big picture.

For instance, let’s say your goal is to reduce customer churn over the next year. In order to do this, your plan and budget need to enable your client engagement team to offer personalized services to those clients who are most at risk.

2. Leverage Learnings from the Previous Year

Financial services planning and budgeting can seem especially tedious in comparison to other sectors. It needn’t actually be this way. When you begin from your business goal and then apply learnings, you will find that you are already several steps ahead.

In fact, you can use your previous year’s budget as a blueprint for this one. Gather your team to analyze what worked for them and where they found deficits. In doing so, you can rebalance your budget to areas that are most in need. Further, by validating these areas against your business goal, you can ensure that your budget is being allocated in the most efficient way.

3. Use Data-Modeling to Predict Outcomes

If you had a way to predict how much each department needs, you might think that this solves a significant portion of your planning and budgeting challenges.

You can, in fact, predict allocation by predicting customer behavior. Imagine if you could understand which customers will need extra attention in the following year. Similarly, if you could identify which ones are most likely to invest more with you. You could then actually plan your activities efficiently around these predictions.

This is possible through data-modeling. Models can help you identify customers based on steps in their journey. The predictive nature of these models can provide a lot of structure to your financial services planning and budgeting activities.

Want to know more about how models can benefit the financial services sector?

4. Plan with Foresight but Leave Room for Iteration

The power of prediction gives you a fair bit of foresight into your planning and budgeting. The more certainty you can have, the better it is for your plan. Having an air-tight plan can set you up for great success in the coming year.

However, most financial services professionals may overlook the need for iteration. While predictions can give you foresight, there are always unforeseen circumstances such as macro-economic instability. Due to this, it is better to include room in your plan for alterations as you go through the year.

5. Empower Your Marketing Team

Financial marketers may find that they are at loggerheads when it comes time for financial services planning and budgeting. As someone in charge of your budget, it will help you to set aside marketing dollars for campaigns and promotions.

Marketing goals need to align clearly with business goals. When this is the case, empowering your marketing team can help you ensure that you closer to achieving your goals. Over time, more marketing efforts have become measurable. This means that the marketing team can present results from their activities in the previous year and your allocation can be driven by this data.

Kick Your Plan into High Gear

By using a collaborative approach, you can make sure that you have received input from all relevant teams. Doing this also helps you speed things up as you have more contributors to the process. Secondly, having a flexible plan reduces the pressure on you to have every detail figured out. Doing this also gives you the ability to iterate as you go.