Achieving Sustainable Cost-Savings in a Low-Margin Environment

Achieving Sustainable Cost-Savings in a Low-Margin Environment published by Datamonitor in April, 2009. This report consists of 23 pages and the price starts from US $ 2795.

Introduction

Abstract

Introduction

Financial institutions struggling to survive the spiraling effects of the credit crunch need to look at rationalizing their costs in order to remain profitable in such a low-margin environment.

Scope of this research

• The past actions of many retail banks have come back to haunt them and banks must revisit their business models to improve cost efficiency.
• Cost management should be targeted to where it will really make a difference.
• Sustainable cost-savings must be the goal of a retail bank cost management program.
• There are opportunities for banks to bring employees and customers closer and achieve cost-savings.

Research and analysis highlights

Highlights how banks can revisit their business models to improve cost efficiency, emphasizing the need for an all encompassing cost-saving strategy.

Outlines specific strategy for identifying where cost savings can really make a difference in order that retail banks achieve sustainable cost-savings.

Identifies examples of programs being employed by banks in order to bring customers closer while at the same time saving costs.

Key reasons to purchase this research

• Identify key areas where costs can be saved while still promoting a customer-centric banking model.
• Highlights cost-savings measures that bring employees closer to the company and that are sustainable in the long-term.

Table of Contents

DATAMONITOR VIEW

• CATALYST
• SUMMARY

ANALYSIS

• The past actions of many retail banks have come back to haunt them
  • Banks' behavior has drawn a huge amount of criticism
  • Changing the minds of a cynical public will require prudency and a significant campaign of goodwill
• Banks need to revisit their business models to improve cost efficiency
  • The cost efficiency of all the major UK banks, except Abbey, deteriorated between 2007 and 2008
• Crisis brings the opportunity for clear strategic gains
  • A cost-saving strategy needs to be board-driven and all encompassing
• Cost management should be targeted to where it will really make a difference
  • Cost-savings efforts should be channeled appropriately so that they prove to be sustainable
• Sustainable cost-savings must be the goal of a retail bank cost management program
  • Staff should be involved in cost-cutting measures
  • Significant cost-savings from process re-engineering are diminishing
  • Combine green initiatives with cost-savings to improve company profile and raise staff awareness
  • Outsourcing can be an important way to save on operational costs but it can be a sensitive issue
  • Emphasizing outsourcing can detract from the need for better customer focus
• There are opportunities for banks to bring the customer closer and achieve cost-savings
  • Banks should utilize available technology to achieve cost-savings and stay in regular contact with their customers
  • Banks can utilize technology to ' go green' , save on costs and build a credible corporate image
  • Banks can reduce costs by rationalizing the portfolio of products and services offered
• A new model of retail banking has less branch staff but greater diversity in the range of work they are able to do
  • Banks need to optimize their utilization of staff and refine service levels

APPENDIX

• Tables
• Bibliography
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Lloyds TSB greenhouse gas emissions
• Table: HSBC' s virtual forest saves the bank money and appeals to green customer sensibilities
• Table: Cost/income ratios of major UK banks, 2007 - 08
• Table: Total advertising expenditure by UK banks, 2008
• Table: Number of customers per retail branch, 2008
• Table: The number of retail branches and customers by bank

FIGURES

• Figure: Most UK banks witnessed rising cost/income ratios between 2007 and 2008
• Figure: Total advertising expenditure by banks and advertising expenditure per customer, 2008
• Figure: Citi uses texts to connect with customers based on their individually-defined criteria
• Figure: BNZ offers tailored packages to its customers from a limited range of products
• Figure: There is a wide range of customers per retail branch in UK banks, 2008

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