Zero-based budgeting: from insights to action

Partner, Financial Services Market Lead, PwC Switzerland

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Faced with rising costs and growing complexity, wealth managers are increasingly turning to zero-based budgeting. Many, however, stop at transparency and fail to act on insights. A new PwC paper describes how to unlock scalable value by moving from analysis to action with automation, AI and new ways of working.

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Zero-based Budgeting

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Zero-based budgeting (ZBB) isn’t just a budgeting tool, but a strategic enabler that helps wealth managers identify where to eliminate, simplify or automate work.

The already complex wealth management value chain is made even more complex by regulatory constraints, legacy systems and growing pressure to deliver personalised service at scale. ZBB brings transparency to cost drivers across each step and client segment, helping wealth managers identify what it costs to serve different clients, where there is misalignment between effort and value, and what can be automated, standardised or outsourced. Many wealth managers, however, struggle to act on the insights gleaned from ZBB, often treating it as a one-off exercise rather than a catalyst for change.

Achieving more with ZBB

In our new whitepaper, Zero-based budgeting - from insights to action, we at PwC’s Zurich-based Wealth Management Centre of Excellence look at what comes next: how to turn ZBB from insight into action. We present real-world use cases across the WM front, middle, and back office, spanning everything from client onboarding, adviser support, compliance and AML, resourcing, treasury and tech stack rationalisation to finance & reporting.

Our experience is that done right, ZBB identifies clear, actionable opportunities that can be implemented immediately by eliminating non-value-adding work, improving productivity through rigorous measurement and simplifying the organisation and its operating model.

But ZBB also helps uncover longer-term opportunities such as tech-driven process redesign, AI use cases, offshore/onshore mix optimisation and third party spend rationalisation. Successful ex execution depends on clear ownership, cross-functional alignment and embedding ZBB into ongoing business planning rather than treating it as a one-off exercise.

In the paper, we outline a framework for using ZBB to identify opportunities at the level of business divisions, assessing their impact and prioritising them, and then implementing the findings. ZBB findings typically fall into three categories: omit, simplify or automate. We focus on simplification and automation use cases spanning the front, middle and back-office functions at wealth managers. While many opportunities exist, we focus on those that have proven highly relevant in shaping the future of the wealth management model.

“ZBB doesn’t fail on numbers. It fails on follow-through. The difference between insight and impact? Execution - led with clarity, backed by leadership and built into the way a firm runs.”

Patrick Akiki,Partner, Financial Services Market Lead, PwC Switzerland

Shifting from cost reduction to value creation

In wealth management, ZBB achieves the most powerful results when guided by principles that look beyond cost reduction to value creation. These principles shape how organisations translate budget insights into transformation:

Client-centric transformation: Every efficiency measure should be evaluated through the lens of client experience and value delivery. Process redesign should simplify interactions for both clients and advisers, not just reduce costs. Technology investments triggered by ZBB should enhance client outcomes while driving operational efficiency.
Technology as an accelerator: AI, automation and digital tools should be leveraged to fundamentally reimagine processes, not just make existing ones cheaper. Technology capabilities should be built to scale with minimal marginal cost. Investments should be prioritised in terms of creating flexibility and adaptability, not just immediate savings.
Value chain integration: Wealth managers should break down silos that separate front, middle and back-office functions. The wealth management value chain should be treated as an interconnected system in which improvements in one area cascade throughout. Wealth managers should target cross-functional processes (like onboarding or compliance) where fragmentation creates the highest costs.
Continuous improvement mindset: ZBB logic should be embedded into operational rhythms rather than treated as a one-off exercise. Wealth managers should create feedback loops that continuously identify new opportunities for optimisation. And they should build capabilities for regular reassessment as market conditions, client needs and technologies evolve.

Where to next?

For more details of the ZBB framework and concrete use cases in wealth management, we invite you to check out the white paper. And feel free to reach out if you’d like to discuss any of these matters in more depth.

Summary

In an environment of rising costs and growing complexity, ZBB is gaining traction in the wealth management industry. But its impact depends on execution. In our new white paper, we show how to unlock value through simplification and automation, presenting real-world use cases to illustrate what’s possible now and what will be possible in the future. A key takeaway: success comes when ZBB drives action, not just insight.