In a new report titled: The productivity agenda – moving beyond cost reduction in financial services, PwC sets out the important challenges and opportunities facing the financial services industry and the ways in which senior executives should respond if they wish to move beyond simple cost cutting and improve profitability in the long term.
With banks struggling to improve their return on capital, many institutions are being forced to restructure and cut costs. Cost-cutting will only deliver so much. If financial institutions are to improve profitability in the long term they need to fundamentally improve the productivity of the enterprise.
Pieter Crafford, Financial Services Advisory Leader for PwC South Africa says: “A number of external factors have put significant pressure on the financial services industry in recent years, leaving many organisations with increased pressure on cost structures. Traditional cost reduction measures can only deliver limited results. Financial services organisations need to tackle the productivity challenge heads on in order to move to a sustainable and low cost business model.”
PwC’s report is part of a series of thought leadership publications dealing with important issues as well as the resultant opportunities facing the financial services industry. In particular, we explore the ways in which senior executives at some of the most innovative and successful institutions are responding.
Based on a detailed global survey of the financial services industry, PwC has identified six areas where financial institutions can focus their productivity efforts to boost long term sustainability:
Andy Wilson, Financial Services Intelligent Digital Lead for PwC Africa, comments: “To be competitive in tomorrow’s financial services industry, banks and insurers, must be able to rapidly deliver a simple, seamless and instant customer experience at a competitive cost. An agile mindset is becoming key to success. Financial institutions are also confronting new disruptive technologies developing at an exponential pace, new forms of regulations, the continuous rise of fintechs and the threats of bigtechs.”
Sustainable productivity improvement is imperative for the financial services industry. The transformation will require technology and humans to work together in a fundamentally new relationship, one in which machines take over routine manual tasks but also assist humans in better executing their roles, creating new opportunities for institutions and their employees. There’s no one right way to approach the productivity challenge, but concentrating on these six areas is a great place to start the journey.
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