Reimagining Technology Organizational Design for the Modern Financial Enterprise

Executive summary

In today's financial landscape, swift technology implementation is key for global banks. Leaders must balance stability in regulated environments with innovation to stay competitive against traditional rivals and fintech disruptors. This requires rethinking organizational design to prioritize technology.

Our experience working with high-performing financial institutions shows that siloed approaches to technology impede desired outcomes. By transforming operational models, successful financial institutions improve technology timelines, initiative success rates and business value.

High-performing institutions are shifting from "plan-build-run" models to integrated platform-centric approaches, combining governance with rapid delivery. This article offers a strategic redesign focused on customer-centricity, cross-functional collaboration and business outcomes while maintaining necessary control in regulated environments.

The imperative for change in financial services

The banking industry has witnessed extraordinary change over the past decade. Digital-first challenger banks like Revolut, Monzo and N26 have rewritten the traditional playbook by deploying technology-centric operating models that enable them to launch new features in days rather than months. Meanwhile, established financial institutions must navigate an increasingly complex regulatory landscape with frameworks like DORA, GDPR, PSD2, Basel III and regional banking regulations while meeting rapidly evolving customer demands.

Despite significant technology investments—often 15-25 percent of total operating costs for major banks—many incumbent institutions struggle to translate this spending into meaningful business outcomes. According to Gartner, 70 percent of financial services executive leaders fear disruption from fintech competitors, and one-third admit they cannot address the operational constraints they face. More than half believe changing their operating model will be extremely difficult.

These challenges stem from fundamental misalignments in how technology functions are structured, incentivized and integrated within the broader financial enterprise:

Siloed organizational structures create competing priorities and discourage collaboration across technology domains, which is particularly problematic in banks where product lines historically operate independently
Disconnected business and technology priorities lead to poor investment decisions, low-value outcomes and missed strategic opportunities
Excessive operational controls, while necessary for regulatory compliance, often create innovation-stifling environments
Legacy technology debt compounds over time, consuming increasing proportions of the technology budget
Talent acquisition and retention challenges plague organizations perceived as bureaucratic or technically stagnant

Our research and experience working with global banks indicate that financial institutions that successfully address these challenges through thoughtful organizational redesign can achieve significant competitive advantages in efficiency, innovation capacity and time-to-market.

Core principles for future-proof financial technology organizations

Based on our work with leading financial institutions, we have identified five core principles that should guide any technology organizational redesign effort:

Organize around customer and business outcomes, not technical domains

The traditional approach of structuring technology organizations around technical domains (infrastructure, applications, security, etc.) creates artificial boundaries that impede collaboration and customer focus. Instead, the most effective banking technology organizations are structured around customer journeys and business capabilities.

A major European bank reorganized its technology function into cross-functional "value streams" aligned to specific customer journeys (e.g., mortgage origination, wealth management, small business lending). Each value stream contained all the technical capabilities needed to deliver end-to-end solutions. This customer-centric reorganization resulted in measurable improvements in delivery speed and customer satisfaction while maintaining the bank's ability to meet its regulatory obligations.

While technical domain expertise remains critical in financial services, it should be embedded within business-aligned delivery teams rather than segregated into functional silos. This approach maintains specialized knowledge while orienting technology work toward measurable business outcomes.

By embedding domain experts into customer-focused teams, banks overcome some of the very silos and alignment gaps that undermine effective collaboration and slow progress on strategic goals.

Establish a common technology delivery platform

As Gartner notes in their research on Cloud IT Service providers, "When CITS providers organize their hyperscaler practices as separate silos, clients often report a more competitive than cooperative experience." This insight applies equally to internal technology organizations within banks and for cloud and non-cloud technology adoptions alike. When different technology functions compete rather than collaborate, friction and suboptimal outcomes result.

Leading financial institutions have implemented centralized delivery platforms that serve as collaboration hubs between customer-facing teams and technology specialists. These platforms standardize workflow, governance, and communication across different technology domains, reducing friction and enabling faster, more reliable delivery.

A North American bank created a unified delivery platform that standardized how business requirements were gathered, how solutions were designed and approved, and how implementations were managed. This platform incorporated regulatory and compliance checks as integral components of the workflow rather than separate processes. The standardized approach improved both delivery efficiency and stakeholder satisfaction with technology projects.

When technology teams and controls are unified on a common platform, institutions reduce fragmented processes that often result in duplicated effort, extra overhead, and inconsistent governance — key obstacles to agility in heavily regulated environments.

Differentiate governance based on risk and business value

Not all technology initiatives in banking require the same level of governance and control. Applying a one-size-fits-all approach to governance typically results in excessive overhead for low-risk initiatives while potentially under-controlling high-risk ones.

Progressive financial institutions have implemented tiered governance frameworks that adjust controls based on each initiative's risk profile and value. Low-risk, incremental improvements might follow a streamlined process with minimal approval gates, while high-risk, regulatory-critical projects receive appropriate scrutiny and oversight.

One global bank implemented a multi-track governance model that applied different levels of oversight based on risk assessment. Low-risk changes followed an expedited approval process, while high-risk changes received enhanced scrutiny. This approach maintained regulatory compliance while enabling higher levels of innovation and more efficient delivery processes. This approach demonstrated that enhanced risk management and accelerated innovation are not mutually exclusive when governance is appropriately tailored to the specific risk profile of different initiatives.

By tailoring governance to actual risk and strategic value, banks avoid unnecessary bureaucracy for more straightforward initiatives while preserving appropriate rigor for sensitive projects — helping prevent disconnected prioritization and control overload.

Create engineering discipline through platform teams

Traditional IT operating models in banking often focus on project delivery rather than product engineering. This approach leads to inconsistent quality, technical debt and brittle systems that are expensive to maintain and difficult to evolve.

Leading financial institutions have established platform engineering teams responsible for creating standardized, reusable components that development teams can leverage. These platforms enforce architectural standards, security controls and operational requirements while simplifying development and reducing time-to-market.

A major US bank established platform engineering teams for key capabilities such as data, security, payments and API management. These teams created self-service platforms that development teams could use to build solutions more efficiently and consistently. The bank improved development efficiency and security posture by standardizing common components and embedding security controls. The platform approach enabled the bank to systematically embed security, compliance and operational excellence into reusable components, reducing the burden on delivery teams and creating consistent standards across the organization.

When banks shift to platform-based engineering, they address the long-standing technical debt at the root and create an environment more attractive to high-caliber talent — two crucial factors for modernizing at scale.

Implement adaptive capacity planning and portfolio management

Traditional annual planning cycles are increasingly misaligned with the pace of technological change and market evolution in financial services. Banks that remain locked into rigid annual plans often find themselves unable to respond to emerging opportunities or threats, including regulatory changes and competitive moves.

Progressive financial organizations have implemented more fluid planning processes, allowing continuous reprioritization based on changing business needs. These processes typically include:

Quarterly business review and reallocation cycles
Reserved capacity for emergent opportunities (20-30 percent)
Clear, consistent prioritization frameworks that balance innovation with regulatory compliance
Transparent visibility into resource allocation across the portfolio

One global bank transitioned from rigid annual planning to a more adaptive approach, with quarterly reviews and capacity reserved for emergent needs. This more flexible model allowed the bank to respond more quickly to market changes and regulatory requirements while maintaining progress on strategic initiatives.

By continuously reassessing and reallocating resources, banks avoid perpetuating legacy issues and maintain close alignment to evolving strategic and regulatory imperatives — reducing the risk of obsolescence and missed opportunities.

A model for future-proof banking technology organizations

Drawing on these principles and insights from Gartner's research on organizational structures, we propose a technology organizational model for financial institutions that balances innovation capacity with regulatory compliance. This model consists of five interconnected components:

Strategic Technology Office

The Strategic Technology Office serves as the primary interface between business units and technology teams. It is responsible for:

Aligning technology strategy with business objectives
Managing demand and prioritizing work based on business value and risk
Providing financial transparency and accountability
Maintaining technology standards and policies
Managing centralized vendor relationships
Overseeing enterprise architecture and technology roadmaps

Key roles in this function include business relationship managers, technology strategists, financial controllers and technology portfolio managers. This office should report directly to the CIO/CTO but maintain strong dotted-line relationships with business unit leaders.

This office is crucial in financial institutions, ensuring that regulatory requirements and risk considerations are integrated into technology planning from the beginning rather than addressed after the fact.

Platform Engineering

Platform Engineering teams build and maintain the foundational components that enable rapid, secure application development. These platforms encapsulate complex technical requirements (security, scalability, regulatory compliance) behind simplified interfaces that development teams can use without reinventing the wheel.

Key platforms for financial institutions typically include:

API and integration platforms with standardized security controls
Regulatory reporting and compliance platforms
Data and analytics platforms with built-in data governance
Cloud infrastructure platforms with appropriate security controls
Payment processing and transaction management platforms
Identity and access management platforms
Developer productivity tools

In line with the principle of creating "engineering discipline," many banks find that organizing by technical domain and embedding regulatory specialists within these teams helps them standardize common components and enforce robust architectural guidelines. This approach also advances the idea of a "common technology delivery platform" by consolidating shared services—such as APIs or security controls—into reusable building blocks that reduce friction for product teams.

Platform Engineering should be organized by technical domain, including embedded business architects and regulatory specialists who ensure platforms are aligned with business needs and compliance requirements.

Product development

Product Development teams build and enhance customer-facing applications and services. These teams should be:

Organized around customer journeys or business capabilities (e.g., mortgage origination, wealth management, payments)
Cross-functional, including product management, design, development, quality assurance, and compliance specialists
Empowered to make decisions within guardrails set by governance
Measured on business outcomes rather than technical outputs

Product development teams should leverage the platforms created by platform engineering teams rather than build everything from scratch. This approach accelerates delivery while ensuring consistent quality and compliance.

Unlike many traditional product development teams that operate independently or focus narrowly on feature delivery, these teams embed risk and compliance professionals directly into the development cycle and are accountable for end-to-end outcomes. They adopt a more "mini-startup" model within the bank—owning everything from conception to release and maintenance—while aligning closely with common technology platforms and governance frameworks. This structure helps them react quickly to market and regulatory changes rather than waiting on multiple siloed approvals. It encourages a consistent engineering discipline that standard teams often struggle to maintain.

By structuring these teams around customer journeys—and granting them autonomy within risk-based guardrails—institutions reinforce the principle of "organizing around customer and business outcomes." In practice, Product Development can resemble mini-startups, with each team responsible for end-to-end delivery and continuous improvement of specific products or journeys. This close alignment between business and technology helps keep priorities connected, even as the institution adapts to market changes or new regulatory pressures.

Operations and Reliability

Operations and Reliability teams ensure that technology services are available, performant and secure. In mature banking organizations, these teams work closely with development teams through Site Reliability Engineering (SRE) practices rather than operating as separate entities.

Key responsibilities include:

Monitoring and alerting
Incident response and problem management
Capacity management
Disaster recovery and business continuity
Security operations and threat monitoring
Regulatory reporting and compliance monitoring

Organizations can reduce production incidents and improve overall resilience by embedding operational considerations earlier in the development lifecycle.

Adopting SRE and automated monitoring also resonates with the principle of "differentiated governance." By continuously measuring system health and applying risk-based controls, banks can stay nimble for lower-risk changes while still protecting high-stakes systems and data. Integrating reliability practices into daily workflows not only ensures stability for customers but also addresses potential legacy concerns by progressively modernizing operational processes.

Common customer interaction and delivery platform

Drawing from Gartner's research on Cloud IT Services, we recommend establishing a common interaction and delivery platform that serves as a central point of collaboration between customer-facing teams and technology teams. This platform:

Provides standardized workflow and communication channels
Enables consistent governance and compliance across all technology domains
Facilitates information sharing and feedback loops
Ensures a consistent customer experience regardless of which technology teams are involved

This common platform addresses a critical challenge identified by Gartner: when separate technology functions operate in isolation, the result is often a competitive rather than cooperative experience for customers. By implementing a centralized interaction and delivery platform, banks can ensure consistent service delivery while still benefiting from specialized technical expertise.

Because it supports fast feedback loops and uniform processes, this single interaction layer reflects the principle of "adaptive capacity planning and portfolio management," providing clarity on ongoing initiatives and resource usage across the organization. It also extends the concept of a "common technology delivery platform" by unifying cross-functional teams in one environment, avoiding siloed intake, and ensuring better change governance.

Measuring success in financial technology organizations

To determine whether your organizational redesign is delivering the expected value, we recommend tracking a balanced set of metrics across five dimensions tailored to financial services:

Business impact

Revenue generated from digital channels
Cost reduction achieved through technology optimization
Customer acquisition and retention through digital journeys
Time-to-market for new financial products
Fraud reduction and prevention effectiveness

Delivery performance

Lead time from idea to production
Deployment frequency for key systems
Change failure rate
Mean time to recover from incidents
Percentage of capacity dedicated to regulatory requirements

Risk and compliance

Regulatory findings and observations
Time to remediate compliance issues
Percentage of controls automated vs. manual
Risk incidents and near-misses
Regulatory reporting accuracy and timeliness

Team effectiveness

Employee engagement and satisfaction
Talent retention rates, particularly for critical skills
Skills development and career progression
Cross-functional collaboration metrics
Innovation metrics (e.g., ideas generated, prototypes developed)

Operational efficiency

Technology costs as a percentage of revenue
Infrastructure utilization and efficiency
Automation levels and operational headcount
Technical debt reduction
Incident frequency and severity

By continuously monitoring these metrics, financial institutions can identify areas where the new organizational model delivers value and where further refinement may be needed.

Potential pitfalls and mitigation strategies for financial institutions

While the benefits of organizational redesign can be substantial, there are several common pitfalls that financial institutions should be aware of:

Pitfall 1: Underestimating the cultural challenge

Organizational redesign is not merely a structural change — it requires significant cultural adaptation. Many financial institutions underestimate the difficulty of changing ingrained behaviors and mindsets, particularly in organizations with long-standing traditions and risk-averse cultures.

Mitigation strategy: Invest heavily in change management, leadership development, and communication. Use behavioral levers (recognition, rewards, consequences) to reinforce desired behaviors. Research from McKinsey & Company reinforces this point, noting that successful digital transformations in financial services typically allocate roughly equal resources to technology implementation and organizational change management.

Pitfall 2: Overcentralizing decision authority

In pursuing operational efficiency, some organizations centralize too much decision authority, creating new bottlenecks and slowing delivery. This is particularly problematic in financial institutions where rapid decision-making may be needed for competitive or risk management reasons.

Mitigation strategy: Implement a thoughtful decision rights framework that pushes decisions to the appropriate level. Distinguish between decisions that require centralized control (e.g., architectural standards, security policies) and those that should be decentralized (e.g., sprint planning, user experience design).

Pitfall 3: Neglecting risk and compliance integration

Financial institutions that fail to integrate risk and compliance considerations into their new operating model often create parallel processes that undermine the benefits of the new structure.

Mitigation strategy: Include risk and compliance professionals in the design of the new operating model from the beginning. Embed risk and compliance capabilities within platform teams and product teams rather than treating them as separate functions that operate outside the main delivery flow.

Pitfall 4: Neglecting middle management

Middle managers often bear the brunt of organizational change but receive the least support. Without their buy-in and capability, transformation efforts can stall.

Mitigation strategy: Provide extra coaching and support for middle managers. Create communities of practice where they can share challenges and solutions. Recognize that their role may change significantly and provide clear guidance on new expectations.

Pitfall 5: Expecting immediate results

Organizational redesign typically delivers value in stages rather than all at once. Unrealistic expectations can lead to premature judgment that the new model isn't working.

Mitigation strategy: Set clear expectations about the timeline for benefits realization. Identify early wins that can demonstrate progress while longer-term changes take hold—measure leading indicators of success rather than just lagging outcomes.

By recognizing and proactively addressing these common pitfalls, banks can steer their transformation efforts toward sustained impact. Yet even the best mitigation strategies must be anchored in a transparent, structured approach. The following roadmap provides a step-by-step guide to implementing the organizational model outlined in this article—ensuring each initiative is carefully sequenced, resourced, and aligned with the bank's broader strategic objectives.

Implementation roadmap for financial institutions

Redesigning a technology organization is a significant undertaking that typically takes 18-24 months to implement in a large financial institution fully. Based on our experience, we recommend the following phased approach:

Phase 1: Assessment and vision (2-3 months)

Conduct a thorough assessment of current capabilities, pain points, and regulatory constraints
Define future-state vision and organizational principles
Identify key metrics for success, including risk and compliance metrics
Map current regulatory obligations to future-state capabilities
Secure executive sponsorship and alignment, including key risk and control functions

Phase 2: Design and pilot (3-4 months)

Design a high-level organizational structure
Define detailed roles, responsibilities, and interfaces
Select pilot areas for initial implementation, typically choosing areas with lower regulatory impact first
Develop talent strategy and training plans
Create detailed implementation plans, including risk management approaches
Engage with regulators as appropriate to address any concerns

Phase 3: Implementation (12-18 months)

Implement organizational changes in waves, starting with less critical systems
Provide coaching and training for leaders and teams
Establish new governance processes, including risk-based control frameworks
Monitor and refine based on feedback
Maintain regular communication with regulators throughout the process

Phase 4: Optimization (ongoing)

Continuously measure performance against metrics
Make incremental adjustments based on feedback
Scale successful practices across the organization
Evolve the model as business needs and regulatory requirements change

By proceeding through these phases thoughtfully and maintaining alignment with risk and regulatory requirements, banks can ensure that reorganization efforts gain real traction. Yet adopting new structures and processes is only the starting point; achieving a truly future-proof technology organization also demands a balanced emphasis on cultural change, process maturity, and strategic oversight. In the following section, we examine how these elements come together to create a lasting competitive edge in the evolving financial landscape

Final thoughts

The financial services industry stands at an inflection point, with technology increasingly recognized as a critical driver of competitive advantage. Traditional organizational models — designed for an earlier era of technology management — struggle to keep pace with the speed, innovation and business alignment required today. Yet transforming a sprawling technology function in a regulated environment is neither swift nor straightforward.

For many institutions, the first priority is to establish a solid, process-optimized foundation that standardizes core IT processes and eliminates duplicative work. Drawing on Gartner's research, banks often begin by operating like efficient "factories":

Adopting frameworks such as ITIL to streamline processes
Centralizing planning and governance under an IT Business Office
Pooling technical resources to optimize efficiency
Consolidating infrastructure and operations to ensure consistent reliability

This structured approach typically includes three core functions — an IT Business Office for planning and governance, a Delivery group focused on efficient project execution, and a unified Infrastructure and Operations team. While such a model provides the essential scaffolding for discipline and consistency, it also carries limitations. Too much emphasis on process optimization can lead to rigidity and hamper the kind of innovation that customers now expect.

Consequently, a process-optimized model should be viewed as a stepping stone rather than an end state. Once these fundamentals are in place, institutions can move beyond purely process-oriented ways of working to embrace the more sophisticated, platform-based structure outlined in this article — one that prioritizes customer outcomes, cross-functional collaboration and engineering discipline, all under a differentiated governance model.

By reimagining technology organizational design around customer-centric delivery, rapid decision-making, and platform engineering, financial institutions can overcome the legacy hurdles holding them back. When combined with risk-based governance, robust operational reliability and an adaptive planning approach, technology can become a strategic enabler rather than a cost center. This balance of innovation and control positions banks to thrive in an era of accelerated change and heightening regulatory complexity.

The time to act is now. With a clear vision, disciplined planning, and unwavering leadership commitment, financial institutions can evolve their technology organizations into agile, high-performing engines of growth — while still maintaining the risk management, compliance and stability that regulators and customers demand. Institutions that adopt this next-generation model will be well-prepared to navigate the challenges and opportunities of the coming decade, leaving those that cling to outdated practices at risk of being outpaced by more agile competitors.

References

1 – Gartner 2024, How to Create an IT Organizational Structure That Drives Efficiency

2 – Gartner 2024, A Strategic Framework for Enterprise Operating Model Transformation

3 – Gartner 2024, Redesign CSP CIO Technology Organization to Support Technology Ambitions

4 – Gartner 2024 - How Cloud IT Services Organization Structure Impacts Customer Centricity

5 – Gartner 2023 - OCIO Organizational Structures Library