Save-to-transform as a catalyst for embracing digital disruption
Deloitte’s Second Biennial Global Cost Survey: Cost management practices and trends in the banking sector
Banks today face significant challenges from every direction. The ongoing environment of low or even negative interest rates continues to create intense margin pressure and barriers to growth. At the same time, increased competition from Neobanks and FinTechs continues to nibble away at the edges of the traditional banking business, posing a constant threat of disruption. Meanwhile, customer preferences and expectations are endlessly shifting and rising as new and incumbent digital innovators redefine how services are presented and delivered.
In this challenging environment, cost management remains a strong imperative for the entire global banking industry; however, the prevailing mindset seems to be expanding from save-to-grow to save-to-transform. Most banks continue to have very positive expectations for revenue growth, and many are using cost reduction as a tool to help fund their required growth investments. However, in today’s increasingly digital world, more and more banks also recognize the need to transform their operations and capabilities with infrastructure investments in key digital innovations, such as robotic process automation, cognitive technologies, business intelligence, and cloud-based ERP systems.
These digital technologies and innovations can deliver dramatic improvements in competitiveness, performance, operating efficiency and, increasingly, cost savings. Equally important, they can also strengthen a bank’s positioning for adverse future events, including economic downturns and digital disruption.
With digital innovation emerging as a critical enabler for both cost reduction and business transformation, we are delighted to present the results from our latest global cost survey. The study includes responses from more than 1,200 executives and senior leaders around the world with direct involvement in cost management, including 188 respondents from major banks.
This report provides an up-to-date view of the cost management practices and trends shaping the future of banking and global business. It also takes a detailed look at how the latest digital technologies and cost management strategies are acting as a catalyst for transformation in a world being actively redefined by digital disruption.