Unlocking Competitive Insights
The Strategic Value of Benchmarking in Banking
Tighter margins and changing customer expectations require today’s banks to outthink and outwork their competitors. Staying ahead requires more than gut instinct–and ironically enough, your competitors can help.
Benchmarking enables you to easily leverage data from your competitors to compare your performance against your closest peers. With tailored benchmarking data, you can understand your competitive position based on your organization’s unique size, customer base, geographic location and product offerings. This lets you identify new opportunities and make data-driven decisions that can deliver high quality growth and sustainable competitive advantage. We spoke with financial services and banking thought leaders to compile the key considerations for leveraging benchmarking data, how to turn the information into action and the importance of selecting the right benchmarking partner.
Table of Contents
Why Benchmarking Matters External Comparisons Confirm Internal Data Gaining Insight While Protecting Trade Secrets The Importance Of Like-For-Like Comparisons Leveraging Granular Data Using Benchmarking To Drive Strategy Understanding The Challenges Of Benchmarking How To Find The Right Benchmarking Partner Where To Start With Benchmarking Take The Next Step
Why Benchmarking Matters
While banks know all about the value of numbers, many still rely on gut instinct or internal data when making important decisions. While experience and proprietary data both have a role to play, leveraging tailored benchmarking data can help provide a new perspective that banks can use to develop strategies to drive profitable growth.
“Benchmarking data helps banks better understand the needs and behaviors of their current customers.”
Jessica Wadd, Segment Leader, Strategy & Innovation at BDO
“Mining information about your own organization is helpful, but it’s usually not enough. It’s an isolated view. Putting your data up against information from other organizations gives you the context you need to determine what is a consistent behavior, what is the movement of the market and what are the signals that may dictate strategy.”
their current customers.”
understand the needs and behaviors of
External Comparisons Confirm Internal Data
External benchmarking enables banks to understand their performance relative to their peers, which helps them avoid using arbitrary numbers as indicators of success or failure. For example, 3% year-on-year deposit growth may be a fine goal and amazing achievement…but not if all your competitors are easily achieving 7%. At the same time, a 1% decrease in deposits could be a harbinger of doom…or it shows you have a top-performing organization in a market where your closest competitors are down 4%.
past performance, it’s deficient relative to understanding how
Matthew Steenson, EVP and Head of Retail Growth Strategies at PNC Bank
“Benchmarking is invaluable to helping you truly understand how well you're executing so you can see where you are doing well, where you are lagging and how you are handling challenges that exist across the industry.”
you’re performing in a broad competitive environment.”
“While it’s easy to compare your current performance to your past performance, it’s deficient relative to understanding how you’re performing in a broad competitive environment.”
For banks that haven’t leveraged benchmarking in the past, the process can sound a little intimidating. To gain access to benchmark reporting, banks typically must also participate in providing data to the research firm. This is where working with a trusted third-party provider can ensure the data that banks share and receive is in aggregate, with all sensitive information removed. This enables banks to access key industry insights without the fear of exposing proprietary information. “The benchmarking data we use never shares any PII information or confidential data. What it does is provide a wider market view. Because they have all our peers’ data, the benchmarking provider can provide a broader view of the market, which we see as complementary to our own internal analytics,” said Partho Shil, Group Manager Customer and Marketing Analytics at PNC Bank.
Gaining Insight While Protecting Trade Secrets
The Importance of Like-For-Like Comparisons
Not all benchmarking is created equal. Rather than comparing your organization to all banks in the country, you need to compare it to institutions that operate in similar geographies, are of a similar size, offer the same products and target the same customers.
A bank in rural Nebraska has little to learn from a national benchmark or banks in Manhattan; however, data from small-market banks across the Midwest would provide valuable insight into the needs of its agriculture-based customer base. “The biggest part of benchmarking is like-for-like comparison with similar peers. It requires similar data so that when comparing your performance to others it is counted in the same way. This means it must come from a trustworthy source that collects the data from others the same way it collects it from you. That way, you won’t be questioning it every time or wondering if other banks are using a different definition or data collection method compared to you,” said Isio Nelson, Managing Director at BAI.
Leveraging Granular Data
Unlike broad economic reports, benchmark data enables banks to get much more granular with how they use data. By breaking down data by bank size, geographic regions, customer segments and product types, banks can use benchmarking data to get a more accurate picture of where to focus their strategy. “An average balance of all accounts tells you nothing. Granularity lets you do things like compare mass market versus high-net-worth, checking versus savings, new customers versus long-time customers or customers in two different markets. This lets you answer new, deeper questions,” said Isio Nelson, Managing Director at BAI.
Using Benchmarking to Drive Strategy
Banks can use benchmarking data to see how their products are performing relative to peers to identify gaps and areas for improvement. For example, banks can adjust their product development strategy, marketing campaigns or where to open a new branch based on how like-minded competitors are performing with new products, features or customer bases.
“Surveying customers tells you what they prefer and what they think they are going to do, which is a good leading indicator. You can then look at benchmarking data to see what has actually happened in the market already. Even though it’s a lagging indicator, you need both to make a solid decision,” said Kate Tuscano, Managing Director, Strategy & Innovation at BDO.
“Benchmarking data can be a framework to galvanize, focus people
and help others in the organization understand that a proposed
initiative is achievable. On the flip side, it can also tell you if you are
already an outlier in terms of penetration or performance so you
don’t spend time chasing gains that might not be available.”
Understanding the Challenges of Benchmarking
When working with a benchmarking partner for the first time, it’s important to know the commitment it will require. “It’s a significant task to get the amount of data the benchmarking partner needs in the format they require for a like-for-like comparison. Someone must make sure it’s rendered correctly and work with the benchmarking partner to get it into their system. You should also have a culture that is data-driven; at smaller banks, you sometimes find people who are not highly interested in data unless it conforms to what they believe,” said Kate. “It sounds silly, but there are still organizations out there that would rather be an ostrich and have their head in the sand. They want to say, ‘Look, we think we are doing just fine, we don’t need or want external validation because it can be a scary thing,’” said John Rountree, Head of Client Engagement at BAI.
Checklist: How to Find a Benchmarking Partner
Identify your benchmarking needs and use cases, such as product performance or marketing effectiveness. Create a shortlist by conducting a search for your specific benchmarking need, such as “deposit benchmarking partners for financial institutions.” Verify this list by asking for recommendations from industry peers. Determine the frequency and granularity of the benchmarking insights you need. Gain executive buy-in to secure the budget and commitment required for effective benchmarking. Highlight the ROI potential that even small performance shifts informed by benchmarking can have on the bank’s bottom line. Check with your data and technology teams to ensure they have the capacity to meet the initial and ongoing data submission requirements. Schedule demos with your top 2-3 benchmarking providers to evaluate their outputs, interpretive capabilities and overall cost.
How to Find the Right Benchmarking Partner
Given the stakes that this data can influence, selecting the right partner for your benchmarking needs is critical. When selecting a partner, consider their years of experience, the numbers of banks in their consortium, their impartiality, the quality of their data, the depth of their granularity and data customization and their overall cost structure. Working with a non-profit firm enables higher assurance that the insights being drawn are unbiased and truly reflective of the market. After all, if a firm sells both consulting services and benchmark reporting, you run the risk that the consultant will skew the benchmarking insights to drive you towards their consulting services or to maintain a relationship.
“There’s a magnitude of difference in the level of trust when you work with an impartial benchmarking partner, because you know the data isn’t a Trojan horse for another project. A non-profit benchmarking partner has just one job: collect, analyze and share data and insights back so banks can use it to make smarter decisions, improve their business and support the overall health of the industry,” said John Rountree, Head of Client Engagement at BAI. “The thing I look for is a robust peer set that is representative of who we’re competing against. If you are an emerging national bank and the peer set is chock full of regional banks, how insightful is that? You also want someone who has been doing it for decades, so you don’t have to think twice about the rigor or consistency of their data collection. If I’m burning time trying to figure out how the benchmark relates to my bank, it’s not something I’m likely going to use again in the future,” said Matthew Steenson, EVP and Head of Retail Growth Strategies at PNC Bank.
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CHECKLIST
Where to Start with Benchmarking
Getting started with benchmarking data can be like drinking from a firehose. Rather than try to use all the data at once, start small and build up your foundation to get some quick wins.
“The first level of maturity is to just get a baseline of what the market is doing. After that, the second level of maturity is using benchmarking data as a rear-view perspective to compare your actions with the rest of the industry to see where you are leading and lagging. Finally, the highest level of maturity is to use more of the granularity options to uncover the nuances that allow you to go from average to top of the class,” said Isio Nelson, Managing Director at BAI.
TAKE THE NEXT STEP
BAI is a mission-driven non-profit organization that provides comprehensive, granular and trusted benchmarking for the financial services industry. With our resources, you can better understand your organization’s relative performance, validate results, improve decisions and identify profitable growth opportunities. Learn more about benchmarking services from BAI.
Learn more about benchmarking services
ABOUT BAI
BAI is a mission-driven non-profit organization that provides roundtables, training, thought leadership, and comprehensive, trusted benchmarking for the financial services industry. With our resources, you can better understand your organization’s relative performance, validate results, improve decisions and identify profitable growth opportunities. Learn more about benchmarking services from BAI. BAI recently merged with RMA (Risk Management Association) to form ProSight Financial Association with the purpose of empowering leaders to strengthen and advance our industry. With complementary expertise and strengths in retail banking, commercial banking, risk and compliance, we are even stronger together as ProSight. Learn more about ProSight. © 2025 CONFIDENTIAL. The content, insights, and research methodologies described in this document are the intellectual property of BAI Center and shall not be reproduced, shared, or released in any public forum or to any third party, including but not limited to, industry analysts or market research or consulting firms, without the express written permission of BAI.
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© 2025 CONFIDENTIAL. The content, insights, and research methodologies described in this document are the intellectual property of BAI Center and shall not be reproduced, shared, or released in any public forum or to any third party, including but not limited to, industry analysts or market research or consulting firms, without the express written permission of BAI.
BAI is a mission-driven non-profit organization that provides roundtables, training, thought leadership, and comprehensive, trusted benchmarking for the financial services industry. With our resources, you can better understand your organization’s relative performance, validate results, improve decisions and identify profitable growth opportunities. Learn more about benchmarking services from BAI. BAI recently merged with RMA (Risk Management Association) to form ProSight Financial Association with the purpose of empowering leaders to strengthen and advance our industry. With complementary expertise and strengths in retail banking, commercial banking, risk and compliance, we are even stronger together as ProSight. Learn more about ProSight.
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