Achieving Aggressive Growth in Financial Services
Seeking Proven Solutions
Financial Services Industry Business Issue Overview
In implementing new models, companies must ensure that initiatives not only reduce costs but meet long-term objectives, improve efficiency, and generate revenue and customer growth.
Global financial institutions face an increasingly complex market – one where profitability of existing products is eroding. Market events – including globalization, a final wave of consolidation, regulatory changes and technology breakthroughs – are forcing financial institutions to shed the transactional orientation of the past and focus on improving the efficiency and customer orientation of their operations.
In this environment, the strategy for achieving organic growth will differ for each institution; however, the following best practices are prerequisites for optimizing growth:
- Create global economies of scale – As companies grow larger and become more global, leveraging technology can lower costs. Creating centralized processing centers creates economies of scale. Another way companies can take advantage of their size is by outsourcing noncore, commoditized transactions. Financial institutions have discovered outsourcing not only cuts costs by up to 50 percent, but can also be a catalyst for business transformation.
- Streamline product and system complexity – Many financial services companies have grown through acquisition, but this kind of growth creates duplicate products, organizations, processes and systems to support them. New organizational models and flexible platforms are necessary to reduce complexity. Companies need to break down organizational barriers, eliminate redundant systems and standardize system interoperability. Modernizing outdated legacy platforms streamlines product time-to-market and improves customer acquisition, giving companies significant competitive advantage.
- Link customer loyalty to operations – As companies streamline operations, they must focus on differentiating the customer experience. Most companies focus on cutting costs, but few have operational processes and tools to standardize the customer experience. Implementing global sourcing transforms business processes, while enabling companies to better support customers without increasing costs.
- Improve the customer experience – Acquisitive growth has affected customers to the extent that customers with multiple products often feel like they are doing business with several companies. Companies need to integrate their channels to provide a unified customer experience that better serves consumers. Maintaining solid service quality is critical for attracting and retaining customers.
- Embed compliance into modernized processes – New regulations, such as Sarbanes-Oxley and Basel II, are consuming technology budgets. Compliance requires process automation with embedded controls, globally integrated views of business activity by customer and product, and transparency in reporting to support supervisory reviews. Establishing controls during process redesign is essential to meeting regulatory mandates.