Achieving Sustainable Growth through Strategic Cost Management

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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 10 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.
Why Accenture Accenture provides clients with a solid approach to cost reduction. Our proven assets, multi-sector track record in financial services and other industries, and award-winning Accenture Global Delivery Network help us deliver effective cost reduction programs and meet a range of IT and business process outsourcing needs. Accenture’s end-to-end strategic cost management capabilities facilitate smart planning as well as efficient implementation and optimization of ongoing operations. Our key differentiators include: Senior teams of industry experts who closely co-operate with client management teams and other key stakeholders to set priorities and optimize savings in the right areas. Implementation focus enables a “make-it-happen” attitude to achieve business results, leverage existing initiatives and provide a combination of quick wins and longer-term savings. In-house, full-service portfolio of resources for operational and financial restructuring and other business functions to be performed on site, near shore and/or offshore, as appropriate. Holistic approach to address costs using an end-to-end, cross-functional transformation that focuses on change management and the promotion of a performance culture to create strategic cost management rather than ad hoc cost reductions. Strategic cost management can— and should—be a continuous process implemented with a long-term view to enabling cost reductions while sustaining sources of revenue generation, creating effective risk management capabilities and developing a nimble organization that is able to adapt to economic, financial and regulatory changes. In this way, strategic cost management can help a bank achieve sustainable growth and be well positioned for high performance in the future. Proprietary assets and specialized methods for: Cost management benchmarking and planning Cost reduction across the banking operating model—from distribution through to back offi ce and IT Cost governance Business process management improvements, including using Lean Six Sigma Savings realization and certifi cation 11
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Achieving Sustainable Growth through Strategic Cost Management

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