As the financial climate becomes challenged with top line growth constrained by low interest rates and uncertainty in consumer confidence, focus needs to move towards cost reduction. Managing a healthy cost: income jaws is now necessary for any financial services provider, so what should be on the agenda?
- Contact centre transformation: how can this asset be leveraged or re-purposed to make it more of a “profit-centre” than a cost centre? How can this real estate be used to drive other actvity that could even be more community-centric
- Data Centre Exit: accelerating the move out of physical data centres and moving more applications onto the cloud. Having the ability to lower the overall total cost of ownership of the technology estate, and driving business agility
- Bad Debt & Collections: Ability to run predictive analytics to prevent delinquency by adopting early warning systems. Investing in the right AI platform to drive mitigation activity. See last week’s blog on some of the ways in which this can be achieved.
- Automating Regulation & Compliance: Lowering the cost of manual processes like KYC, AML, Underwriting, compliance checking, payment remediation to name but a few. This significantly lowers the overall operating cost position, as well as enabling workforce transformation
- White labelling: for commoditised services that can be offered out to other players in the financial services market, consider white-labelling to again turn cost-centres into revenue generating units
The overall theme for all of these initiatives is either mitigate the cost, or leverage the out-lay which seem to be the most popular approaches being adopted across retail banking in particular.