Compliance in digital innovation: Managing digital transformation at Treasury Bank

Digital transformation has become a strategic priority for banks seeking to improve operational efficiency, strengthen controls, and remain competitive. In highly regulated environments, however, technology projects cannot be evaluated on operational merit alone; they must also satisfy regulatory, security, audit, and governance requirements. This teaching case examines the implementation of an outsourced Real-Time Gross Settlement (RTGS) high-value payment processing system at ‘Treasury Bank’, a large commercial bank, and traces how compliance shaped decision-making across the entire project lifecycle. What began as a seemingly straightforward automation of a manual, email- and paper-based treasury process evolved into a broader organisational transformation involving Compliance, Risk Management, Information Security, System Audit, Legal, and Data Governance functions. The case follows five implementation phases – project assessment, vendor assessment and business approval, system development, testing and validation, and go-live – showing how governance reviews influenced vendor selection, security assessments, audit requirements, and final approvals. Drawing on interviews with business and IT stakeholders directly involved in the project, the case highlights both the benefits of embedding compliance throughout the transformation, including stronger controls, greater transparency, improved auditability, and higher system quality, and the challenges this approach created, such as additional reviews, increased coordination, and extended timelines. It concludes with the strategic dilemma facing senior management: how to maintain robust compliance and governance while keeping digital transformation responsive and timely. The case suits undergraduate and postgraduate courses in Information Systems, IT Governance, Digital Transformation, and related fields.