Strategic Cost Reduction for Banking - Accenture
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Converting cost to growth Why strategic cost reduction matters in banking 44% 42% For more information visit: www.accenture.com/banking-cost-reduction © 2016 Accenture All rights reserved. Reducing costs, but often being disappointed by returns... 30% 24% of banks prioritize reinvesting cost savings to align with strategy and faster ROI of banks intend to funnel cost savings into growth initiatives and have an enterprise-wide strategy to do so Linking cost reduction to value creation Competing priorities leading to misaligned initiatives... Being aligned around cost and growth initiatives of banking executives said end-to-end business diagnostics are the most relevant cost management and business performance improvement techniques 18% of banking executives have utmost confidence in their leadership team’s investment and growth initiatives Counteracting the rise of nimble FinTechs... Securing the right capabilities for sustainability of banking executives said digital strategies are an enabler of advanced operating models of banking executives said they undertake a formal review of investment success Maintain a holistic approach Connect cost reduction and investment decisions Adopt a digital, agile operating model Three ways to win Banking executives want to reclaim profitability… …but they are faced with three challenges Banks are seeking 11% return on equity (RoE) 35-45% cost-income ratio Research shows that by embracing strategic cost reduction, banks can fund new streams of growth and better compete. 1 2 3 Be aggressive in tackling the cost base. Develop a cost-conscious culture by embracing spend visibility and cost category ownership. Directly address the drivers of consumption in your bank. Reinvest cost savings in initiatives that drive value creation and fuel new growth. Undertake an end-to-end assessment of the bank’s enterprise across its front-, middle- and back-office functions. Define a future state that recognizes a different approach to cost, then design and embed the right digital capabilities to execute with pace and certainty, and achieve sustainability in an era of digital disruption.
Transcript of Strategic Cost Reduction for Banking - Accenture
Converting cost to growthWhy strategic cost reduction matters in banking
44%42%
For more information visit: www.accenture.com/banking-cost-reduction
© 2016 Accenture All rights reserved.
Reducing costs, but often being disappointed by returns...
30% 24%of banks prioritize reinvesting cost savings to align with strategy and faster ROI
of banks intend to funnel cost savings into growth initiatives and have an enterprise-wide strategy to do so
Linking cost reduction to value creation
Competing priorities leading to misaligned initiatives...
Being aligned around cost and growth initiatives
of banking executives said end-to-end business diagnostics are the most relevant cost management and business performance improvement techniques
18%of banking executives have utmost confidence in their leadership team’s investment and growth initiatives
Counteracting the rise of nimble FinTechs...
Securing the right capabilities for sustainability
of banking executives said digital strategies are an enabler of advanced operating models
of banking executives said they undertake a formal review of investment success
Maintain a holistic approach
Connect cost reduction and investment decisions
Adopt a digital, agile operating model
Three ways to win
Banking executives want to reclaim profitability…
…but they are faced with three challenges
Banksare
seeking11%
return on equity (RoE)35-45%
cost-income ratio
Research shows that byembracing strategic costreduction, banks can fundnew streams of growthand better compete.
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2
3
Be aggressive in tackling the cost base. Develop a cost-conscious culture by embracing spend visibility and cost category ownership. Directly address the drivers of consumption in your bank.
Reinvest cost savings in initiatives that drive value creation and fuel new growth. Undertake an end-to-end assessment of the bank’s enterprise across its front-, middle- and back-o�ce functions.
Define a future state that recognizes a di�erent approach to cost, then design and embed the right digital capabilities to execute with pace and certainty, and achieve sustainability in an era of digital disruption.
