The Flexibility Test: What can UK banks learn from Ireland’s operational performance?

  • Richard Jeffery, CEO at ActiveOps

  • 14.11.2023 10:15 am
  • #banking

This year saw Ulster Bank and KBC announcing their departure from Ireland, leaving the rest of the Irish banks flooded with new customers. In many cases, such a rapid spike in demand could have left operations teams at these banks drowning in unmanageable workloads. Instead, Irish banks showed off a great deal of flexibility within their operations which allowed them to fully reap the benefits of the situation – making the sudden influx a great problem to have.

At the same time across the sea, the UK banking sector is facing another challenging year. Rising interest rates, plummeting house prices and the wealth of uncertainty for the future are testing how agile and flexible their operations model British is and how well they can manage fluctuating demands.

While the challenges the UK and Ireland are having to face are different, the problem they had to solve is the same – agility. So what are the lessons that UK banks can learn from their colleagues across the Irish sea?

What can the UK banks learn from Ireland’s flexibility test?

In the most recent Opstracker report from ActiveOps, operational performance in the UK and Ireland rose to 50.2% from 44% in the first three months of the year, illustrating that the productivity in both regions is slowly improving but remains in a tricky state.

There are many factors currently impacting the economic landscape which are out of anybody’s control, but the good news is there are some things that UK banks can learn from their Irish counterparts to ensure they are maximising productivity when things start to pick back up again.

One example is how Ireland’s pillar banks - AIB, Bank of Ireland and Permanent TSB - have handled the massive spike in activity over the past year. After Belgium’s KBC Bank and Northern Ireland’s Ulster Bank exited the market, Ireland’s remaining big banks have absorbed more than one million new customers between them. This had an outsized impact on operations teams, who have needed to learn how to be agile and handle a much higher workload. This enormous increase in demand for banking in the country, could have left operations teams in a state of distress, unable to meet the expectation of new and existing customers due to unmanageable workloads. 

Instead, there has been a fresh hiring push for more back-office staff within Irish banks and an increased shift towards outsourcing to manage higher inbound work volumes. Looking ahead, Ireland’s banks are now continuing efforts on digital transformation and automation, and putting a greater focus on agility, productivity and efficiency. 

Improvements can still be made in the UK and Ireland

While the UK and Ireland have seen performance improve over the past quarter, the joint region continues to lag the rest of the world in multiple areas – underscoring the scale of improvement needed if the two countries are to make meaningful performance gains in the long term.

For instance, workers are now taking more time off in the UK through sickness or injury than they have in almost 20 years, while nearly one-in-five employees are actively being disruptive at work. To improve focus, organisations must strive to reduce excessive downtime while also maintaining employee wellbeing to ensure workers are happy and engaged and not having a negative impact on productivity.

According to the latest Opstracker report, UK organisations are spending significantly less time on non-core activities than other regions (61% compared to mid-70s elsewhere). While that has been impacted by a decline in inbound work, operations leaders need to ensure that any idle time is being maximised for when volumes return to more normal levels.

Organisations have made progress on control levels over the past year, such as getting better at planning and improving processes, but levels still remain lower than other regions, highlighting there is more work to do to appropriately allocate and stretch workers. 

Rather than merely wait to see signs of improvement, ops managers need to focus on agility-boosting activities during these quieter periods. By improving control levels, UK organisations can ensure effectiveness remains robust once activity begins to pick up again.

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