Welcome!

News Feed Item

World's Leading Retail Banks Outperform Peers in Both Customer Focus and Operational Efficiency, BCG Reports

Top-Performing Banks "Reject Traditional Tradeoffs" Between Serving Clients and Boosting Efficiency, Ramping Up Digital Channels to Achieve Both Goals

BOSTON, MA -- (Marketwired) -- 05/13/14 -- The top performers among the world's leading retail banks are improving operational effectiveness while also becoming more customer-focused than their competitors, according to a report released today by The Boston Consulting Group (BCG).

The report, titled Operational Excellence in Retail Banking 2014: No Compromise--Advocating for Customers, Insisting on Efficiency, details the findings of BCG's fourth annual benchmarking of the global retail-banking industry. The benchmarking covered 18 of the 35 top retail banks in the Americas, Europe, and Asia-Pacific, collectively referred to as "premier league" banks.

"The top banks reject traditional tradeoffs and compromises between boosting efficiency and advocating for customers," said Michael Grebe, a BCG partner based in Munich and coauthor of the report. "Many if not most of them are developing and deploying digital capabilities to address both sets of challenges."

As banks adapt to continuing weak macroeconomic conditions, BCG's study found, customer centricity, supported by efficiency gains, has become an increasingly important competitive differentiator.

The most efficient and profitable half of the total field of 18 benchmarked premier-league banks surpassed the premier-league median in client excellence. At the same time, the leading banks have opened a gap with other banks by boosting productivity and reducing organizational complexity, the benchmarking showed.

Collectively, the leaders achieved a cost per customer of approximately half the median of benchmarked banks, while their income per customer was nearly 30 percent above the median, at more than $1,000. The top-quartile banks dedicated 82 percent of resources, excluding overhead, to client-facing roles.

Many leading banks are achieving step-change improvements in customer products and services by optimizing their business models, BCG found.

"The leaders have developed scalable models of efficient service," said Christophe Duthoit, a BCG senior partner based in Paris and another coauthor. "They are migrating most low-value transactions to alternative channels, tightly limiting nonclient-facing staff, and streamlining management."

The benchmarking confirmed BCG's earlier findings that retail banks that are the strongest operationally also deliver superior financial performance. Top-quartile banks achieved cost-to-income ratios -- a key measure of efficiency and profitability -- at or below 40, compared with the median of 54.

BCG identified four areas of focus that the leading premier-league banks share in common: competitive advantage through customer centricity, increased sales performance through digitization, excellence in organizational and process efficiency, and complexity reduction that drives business results.

Growing Digitization Boosts Bank Sales Performance

Digital engagement of clients with banks is expanding quickly, particularly mobile transactions, which quadrupled. The largest gap between top-quartile and median performers was in the share of online versus branch transactions, BCG found.

Expanding digitization is enabling stronger sales performance in two ways. First, multiple interactive channels please customers by giving them what they want, when and where they want it. Second, digital channels reduce operational costs and boost productivity by requiring fewer in-person, branch-office interactions.

Attracting and serving high-income-producing clients and expanding share of wallet have become key differentiators, BCG found. Increasingly, leading banks are turning to big data, sophisticated analytics, and digital capabilities to achieve those goals.

"However, we believe the main challenge for banks, before tackling big data, is to develop 'rich data' -- that is, customer information that is complete, current, coherent, and consistent," said Ian Walsh, a BCG partner based in London and the global leader of the firm's retail-banking segment. "Rich data is far more important than external data feeds in allowing banks to extract key insights."

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.

About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost ...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
SYS-CON Events announced today that SD Times | BZ Media has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and commercial UAV markets.
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to max...
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
MongoDB Atlas leverages VPC peering for AWS, a service that allows multiple VPC networks to interact. This includes VPCs that belong to other AWS account holders. By performing cross account VPC peering, users ensure networks that host and communicate their data are secure. In his session at 20th Cloud Expo, Jay Gordon, a Developer Advocate at MongoDB, will explain how to properly architect your VPC using existing AWS tools and then peer with your MongoDB Atlas cluster. He'll discuss the secur...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service.
Niagara Networks exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.