The call for rerouting: Turkish banking sector outlook 2015
Macro-economic conditions, market and customer dynamics and regulative changes will continue affecting the Turkish banks’ profitability in 2015. While banks try to manage long and short term risks, they will also continue to focus on cost effectiveness. According to the senior executives of the reputable banks in the Turkish banking sector, digital banking and new branch models as well as banking solutions for the new generation are expected to gain more prominence.
According to “The call for rerouting: Turkish banking sector outlook 2015” report, the pressure on profitability levels will continue while the increased costs will further challenge competitiveness in the banking sector, which is shaped by macro-economic conditions, market and customer dynamics and regulative changes. This a period when Turkish banks need to reconsider their current pricing strategies, target segments, operating models, investments and cost items.
New branch models and banking solutions for the new generation will be on the agenda of the Turkish banks
According to the senior executives of the reputable banks in the Turkish banking sector, digital banking and new branch models as well as banking solutions for the new generation are expected to gain more prominence.
The report also provides several recommendations for the Turkish banking sector to help navigate through the challenges of the current environment:
· Risk perspective
o Re-strategize towards regulatory changes: Turkish banks should rethink their pricing and credit management strategies as complying with the changing regulations has become more challenging than ever.
o Effective risk management: Turkish banks should reconsider their risk management model and structure.
· Operational perspective:
o Cost efficiency: Turkish banks need to redesign and align their processes and organization, revise branch banking and focus on cash management and alternative distribution channels in order to take control of costs in the long run.
o Effective performance models: Building individual performance modelling in the head office and branches and measuring performance management with analytical models should be a priority for the Turkish banks.
· Customer perspective
o Cross-channel alignment: Building the right channel integration strategy, pricing of the services offered, consistency of the systems used, and defining multichannel organization and processes will be high priorities for the Turkish banks in the upcoming years.
o Deep dive customer analytics: Rather than approaching selling products and services to customers, new approach should be based on necessity of the customers. Banks should move away from a “campaign for everybody” to “offer what the customer really needs” approach, while managing customer satisfaction through not bombarding everyone with campaigns.