Achieving Sustainable Growth through Strategic Cost Management

Six recommended actions
By using a smart combination of
tactical cost reductions, proactive
cost governance and strategic cost
management initiatives, a highperformance
efficiency bank can be
created. This type of bank usually
benefits from having implemented
the following six recommended actions:
Create a lean organizational structure
to minimize management layers, clearly
define roles and make extensive use of
shared services to de-duplicate activities.
Rationalize the bank’s product
portfolio so that it offers standardized
components and reusable product
features that can be grouped into
tailored customer offerings that
drive profitability.
Optimize the operating model
architecture by moving progressively
from a high fixed-cost base to a
variable lower-cost base using offshoring
and outsourcing. Strategic
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sourcing provides the flexibility
to “dial up” or “dial down” costs
and capacity according to market
conditions and business goals.
Streamline and automate processes,
encouraging a culture of end-to-end
process ownership and continuous
improvement.
Deploy a multi-channel mix of
capabilities for an effective customer
experience that delivers satisfying
self-service options for simple sale and
service transactions while focusing the
right amount and quality of professional
resources on interactions with the
most profitable customers.
Modernize and simplify the technical
architecture to implement capabilities
that extract intelligence from data
analytics to enhance customer targeting
and service, capitalize on the mobile
revolution and revamp the bank’s
capacity for managing risk.
Accenture believes that, despite recent
cost reduction initiatives, expenses at
most North American banks are still at
least 20 percent—and in some cases
40 percent—too high. With savings
generated from tactical cost reductions,
many banks can create self-funding
programs for strategic operating model
or process improvements that have
long-term business benefits.
With flexible and streamlined
organizational structures, a bank
can improve its ability to meet evolving
customer needs. It can also be prepared
to lead the way in the changing
financial services landscape with
its new non-banking competitors such
as telecommunications companies,
retailers, electronics makers and
internet providers.