Across the globe, banks are under increased pressure to comply with ever-changing governance, risk and compliance regulations, laws and public expectations. The financial services sector operates in a highly regulated environment. When it comes to programme delivery or implementation of large-scale regulatory initiatives, banks typically have mature control mechanisms, risk management practices and governance structures in place with stringent approval, monitoring, reporting and documentation requirements.
As a result, the common perception is that the traditional waterfall model is the ideal approach for such a controlled landscape due to its predictability and linear, sequential and structured approach. An agile approach, on the other hand, is perceived to inherently weaken control because of its speed, team autonomy and flexibility.
Our new paper Running agile in a highly regulated environment looks at how banks can unleash the power of agile in a highly regulated environment, taking into account common perceptions within the industry.
Proposed actions to address your concerns
While regulatory requirements continue to expand in scope, we believe that applying traditional programme methods in a highly regulated working environment leads to large amounts of company resources being wasted. The typical characteristics of regulatory programmes (expensive, risky, with tight, non-negotiable deadlines and usually requiring a new technical solution) often demand an agile, not a sequential approach.
We suggest three actions as part of overall agile project management to help realise business value, reduce the risk of implementing the wrong legal guidelines and increase overall success with regulatory compliance:
Adhere to regular feedback cycles
Focus on MVP with essential features
Consider agile enterprise maturity for programme method
The PwC agile maturity assessment tool evaluates a company’s current agile maturity in five essential dimensions, including a recommendation of action for each dimension to bridge the gap to the target state. The incorporated key agile dimensions can be mapped against all major agile frameworks. The insights won by the PwC maturity assessment tool help you to speed up your agile transformation. Eventually, we dive into two options for the degree of agile transformation in your highly regulated environment that can be applied based on your agile maturity: A) a partly agile transformation with the hybrid model and B) full enterprise agility.
Conclusion
This paper outlines to what extent an agile programme approach – compared to traditional waterfall delivery – is suitable when working in a highly regulated environment. We strongly believe that the often-held perceptions of agile-led programmes arise from a lack of knowledge and experience of agile programme delivery. In fact, programmes that are delivered in heavily regulated environments are typically expensive, risky, with tight, non-negotiable deadlines and a continuously developing scope, and ultimately usually require a new technical solution. This suggests that organisations would benefit from agile methods.
Based on our experience, an agile delivery model can reduce overall resource investments for initiatives in a highly regulated environment and increase the chance of implementing the right technical solutions in the required time frame. But the success of an agile programme delivery mainly depends on the extent to which an agile mindset and behaviours are already embedded within the whole organisation – emphasising the need for profound agile people transformations.
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