Strategic Cost Reduction for Banking - Accenture

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Transcript of Strategic Cost Reduction for Banking - Accenture

  • Converting cost to growthWhy strategic cost reduction matters in banking


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    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 teams 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



    return on equity (RoE)35-45%

    cost-income ratio

    Research shows that byembracing strategic costreduction, banks can fundnew streams of growthand better compete.




    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 banks enterprise across its front-, middle- and back-oce functions.

    Define a future state that recognizes a dierent 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.