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2020 Foresight Report: Maximizing Retail Banking Cost Efficiencies

Published By :

Timetric

Published Date : Sep 2013

Category :

Banking

No. of Pages : 56 Pages


Synopsis

  • The report provides analysis, information and insights into various strategies adopted by banks to maximize cost efficiencies
  • The report provides a snapshot on retail banking market dynamics and profitability outlook
  • The report offers and analysis of changing regulation and its impact on branch banking
  • The report has detailed analysis of major drivers and challenges impacting the profitability of retail banks
  • The report includes best practices case studies

Executive summary

Banks across the world are revisiting their operational strategies, branch banking models, distribution channels and expansion strategies to achieve cost efficiencies and increase profits. To increase profitability, the focus is on selling high-margin profitable products and services, and scaling down unprofitable operations. There has been increased emphasis on utilizing technology to improve profitability and achieve cost efficiencies; the role of technology has changed from being a process driver to a revenue generator. 

Retail banks are using technology to increase profitability by utilizing customer relationship management (CRM) systems and consumer analytics to identify new customer groups and offer customized products and services to targeted customers. In addition, key measures adopted by retail banks to improve operational efficiencies include an increase in information technology (IT) spending and upgrading IT systems.

Scope

  • This report provides a comprehensive analysis on various strategies adopted by banks to maximize cost efficiencies
  • It provides detailed analysis on current and future drivers of retail banking profitability
  • It outlines the impact of current regulatory changes on branch banking
  • It provides insights into technology strategies adopted by retail banks to drive profitability.
  • It examines the best-practice product design frameworks adopted by retail banks to drive profitability
  • It examines the best practices in distribution channels and consumer-engagement strategies adopted by retail banks to drive profitability
  • It presents case studies which illustrate how retail banks across different markets have successfully implemented expense management best practices to successfully target customer groups and achieve cost efficiencies

Reasons to buy

  • Gain insight into the various strategies adopted by banks to maximize cost efficiencies
  • Learn about the most effective banking business models
  • Understand current and future drivers of retail banking profitability
  • Examine best practice case examples adopted by various banks across the world to increase profitability and achieve cost-efficiency

Key highlights

  • Global banks are currently seeking opportunities to enter high-growth emerging markets to drive revenues.
  • Banks are divesting unprofitable business segments, product offerings and customer groups that are not part of their core business strategy.
  • There will be increased investment in self-service and digital media channels to communicate with customers promptly and effectively.
  • Banks are expected to increase their spending on integrating distribution channels to provide a seamless customer experience across all distribution channels.
  • Use of business intelligence analytics to develop products and services that fulfill the unique needs of customers is expected to be at the core of banks’ product-design strategies.
Table of contents

1 Executive Summary

2 Retail Banking Market Dynamics and Profitability Outlook
2.1 Profitability Outlook of Retail Banks
2.2 Analysis of Market Drivers and Key Challenges

3 Technology Strategies
3.1 Technology Strategic Framework for Profitability
3.1.1 Revenue focus areas
3.1.2 Cost focus areas
3.2 Best Practices
3.2.1 Bank of Baroda re-engineered its IT processes to gain operational efficiencies
3.2.2 Bank Sohar of Oman integrated its multichannel delivery platform
3.2.3 Adoption of modern technology by Capital Bank to counter money laundering
3.2.4 Bank Central Asia (BCA) signed up NICE Actimize to improve AML IT infrastructure

4 Product Design and Pricing Strategies
4.1 Product Design Framework for Profitability
4.2 Best Practices
4.2.1 Citibank in Australia adopts product bundling strategy to strengthen its position
4.2.2 Bulbank launched female-friendly branch and products to service its niche customer segment
4.2.3 BankAtlantic developed an effective deposit pricing strategy to increase its profit margin

5 Distribution Channels and Consumer Engagement Strategies
5.1 Distribution Channel Framework for Profitability
5.1.1 Revenue generation strategies
5.1.2 Cost-reduction strategies
5.2 Best Practices
5.2.1 Danske Bank migrates towards digital banking to cut costs
5.2.2 BBVA focusing on self-service channels to reduce operating costs
5.2.3 ASB Bank in New Zealand launched a virtual bank for effective customer engagement
5.2.4 Maybank customer engagement strategy
5.2.5 Union First Market’s loyalty program to scale-up business
5.2.6 Department store concepts adopted by Mauritius Commercial bank to cross-sell

6 Expense Management Strategies
6.1 Expense Management Framework for Profitability
6.1.1 Revenue generation strategies
6.1.2 Cost reduction strategies
6.2 Best Practices
6.2.1 Korea Exchange Bank outsourced its procurement function to achieve cost efficiency
6.2.2 Increasing realty cost and innovation led Wells Fargo to launch mini-branch
6.2.3 ABN Amro integrated videoconferencing to reduce costs

7 Appendix
7.1 Methodology
7.2 Contact Timetric
7.3 About Timetric
7.4 Timetric’s Services
7.5 Disclaimer

List of Table


Table 1: Current and Future Drivers of Retail Banking Profitability
Table 2: Impact of Banking Regulations

List of Chart


Figure 1: Market Drivers and Key Challenges
Figure 2: Key Factors for Technological Investment
Figure 3: Technology Strategic Framework for Profitability
Figure 4: Case Study – Bank of Baroda
Figure 5: Case Study – Bank Sohar
Figure 6: Case Study – Capital Bank Signed Up SAS for AML Solutions
Figure 7: Case Study – BCA Deployed AML Solutions From NICE Actimize
Figure 8: Case Study – Citibank Australia
Figure 9: Case Study – Bulbank Bulgaria
Figure 10: Case Study – BankAtlantic
Figure 11: Distribution Channels Best Framework for Profitability
Figure 12: Channel Evolution in Multichannel Banking
Figure 13: Channel Evolution by Products and Services in Multichannel Banking
Figure 14: Next Generation Branch Banking Models
Figure 15: US Bank In-Store Branch
Figure 16: Case Study – Danske Bank
Figure 17: Case Study – BBVA Bank
Figure 18: Case Study – ASB Bank
Figure 19: Snapshot of ASB Virtual Branch on Facebook
Figure 20: Case Study – Maybank
Figure 21: Total Relationship Banking Loyalty Program Offered by Union First Market Bank
Figure 22: Case Study – Mauritius Commercial Bank
Figure 23: Expense Management Best Practices for Profitability
Figure 24: Case Study – Korean Exchange Bank
Figure 25: Case Study – Wells Fargo Bank
Figure 26: Case Study – ABN Amro Bank
Figure 27: ABN Amro’s High-Tech Bankshop Facility

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