|By Marketwired .||
|May 13, 2014 12:01 AM EDT||
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.
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.
The Boston Consulting Group
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Aug. 2, 2015 07:15 PM EDT Reads: 207
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
Aug. 2, 2015 06:00 PM EDT Reads: 1,120
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Aug. 2, 2015 05:45 PM EDT Reads: 505
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
Aug. 2, 2015 04:00 PM EDT Reads: 414
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Aug. 2, 2015 03:00 PM EDT Reads: 541
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
Aug. 2, 2015 02:00 PM EDT Reads: 238
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
Aug. 2, 2015 12:00 PM EDT Reads: 341
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
Aug. 2, 2015 11:45 AM EDT Reads: 478
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
Aug. 2, 2015 11:15 AM EDT Reads: 349
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
Aug. 2, 2015 11:00 AM EDT Reads: 168
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
Aug. 2, 2015 09:00 AM EDT Reads: 1,698
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
Aug. 2, 2015 08:15 AM EDT Reads: 180
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
Aug. 2, 2015 07:00 AM EDT Reads: 179
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Aug. 1, 2015 09:00 PM EDT Reads: 672
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Aug. 1, 2015 10:00 AM EDT Reads: 334