When Hitting Every Target Produces the Wrong Outcome
The bank met its digital targets. It met its commercial targets. It met its operating targets. It remained within its risk limits.
Performance deteriorated.
The problem was not that no one executed.
Everyone did.
Digital originated. The branch network served. Operations processed. Risk imposed limits. Finance measured. Each function did its job, and each dashboard explained part of the outcome.
But no unit could bring the consequences together.
Banks often portray execution as a cascade: senior management sets priorities, functions translate them into plans, and channels deliver them to the customer. The image explains how an instruction travels. It does not explain where the operating model becomes performance.
Execution does not take place where the work is performed.
It takes place where its economic consequences can be brought together and changed.
A strategy is not executed within a channel, a function, or a box on the organization chart. It is executed within a perimeter capable of integrating revenue, costs, risk, and capital, and of acting on the decisions that produce them.
Its organizational form may vary. It becomes a unit of execution only when it coincides with a governable economic unit.
The true unit of execution is not organizational.
It is economic.
The Channel No Longer Coincides with the Business
For decades, a channel broadly coincided with a recognizable part of the business. A branch originated, served, and maintained the customer relationship. Its revenue, costs, and capacity could be observed within a relatively stable perimeter.
Not anymore.
Customers now move across apps, branches, payment platforms, specialist centers, and centralized processes within a single economic relationship. An interaction begins in one channel, consumes capacity in another, and ends with the revenue attributed to a different unit. The more channels emerge, the less useful it becomes to manage each one as if it were a complete business.
Specialization distributes the work.
It does not reassemble its consequences.
The conventional response is to create more metrics. It is also the wrong one. Digital adoption, branch traffic, sales productivity, processing times, and service quality all describe real contributions. But more metrics do not integrate a fragmented economic unit. They merely produce a more precise description of the fragmentation.
Regional evidence reveals the shift. In Colombia, the 2025 Financial Inclusion Report, produced by Banca de las Oportunidades and the Financial Superintendency of Colombia, found that internet and mobile applications accounted for nearly seven out of every ten monetary transactions. At the same time, branches handled 22.7% of the total value transacted, while physical and mobile correspondents reached 100% of the country's municipalities.
In Costa Rica, the Central Bank of Costa Rica states that SINPE Móvil enables transfers through different electronic-banking channels using an interoperable service available 24 hours a day, every day of the year, with real-time settlement.
Hybrid banking does not, by itself, prove that economic attribution is flawed. It does, however, destroy the old equivalence between channel and outcome, making it necessary to rebuild that connection through explicit economic rules.
Latin American banking is not simply replacing a physical network with a digital one. It is layering multiple channels over the same economic relationship.
The question is no longer where the transaction took place.
It is where its consequences can be governed.
Contribution Is Not Performance
When every participant claims part of the outcome, the organization begins to lose sight of it. One unit recognizes the revenue. Another absorbs the capacity. A third reports efficiency because risk and capital remain outside its management view.
Each can measure its activity correctly and still be wrong about performance.
This is how cross-subsidies, apparent profitability, displaced costs, and investments whose commercial contribution is never tested against their full economic burden accumulate. The bank may reward volume that consumes capital without delivering an adequate return. It may retain capacity that no unit can justify. It may penalize a profitable activity because the costs appear where the service is delivered while the revenue is recognized where the relationship began.
The problem was never that many parties contributed.
It was confusing contribution with performance.
Contribution can be distributed across origination, conversion, servicing, retention, and recovery. Performance cannot. It must be integrated within a unit that brings together revenue, costs, risk, and capital under a common set of rules.
Contribution explains who participated.
Performance determines whether value was created.
Confusing the two allows a transaction to have many owners while the outcome has none.
More control over activity.
Less control over the business.
The Precision That Undermines Control
When the economic view follows functional boundaries, each area optimizes what it can defend. Digital pursues adoption. The branch network protects volume. Operations reduces unit costs. Risk contains exposure. Finance reconciles everything at the end.
The bank can explain every component and still fail to explain the outcome.
A digital investment reports user growth, but no unit absorbs both its costs and benefits. A customer segment exceeds its commercial target but consumes capacity elsewhere. A branch appears inefficient because it handles interactions whose value is recognized in another channel.
Local precision creates an illusion of control: the more detailed the measurement of the parts, the less visible the aggregate outcome may become.
IFRS 8 rests on a useful intuition: an activity with differentiated revenue and expenses should be reviewed regularly to assess performance and allocate resources. The analogy is managerial, not accounting-based. What cannot be observed separately cannot be managed with precision.
A unit of execution must bring together its economic drivers, have the authority to change them, apply comparable methodologies, and review performance in time to correct it. If any of these conditions is missing, apparent decentralization is merely the distribution of activity.
This does not mean that every unit should define its own capital methodology or govern risk independently. Those frameworks belong to the bank as a whole. Their economic effects must, however, reach the point at which decisions are made. If they remain buried in corporate cost centers and control functions, the unit manages activity, not performance.
