Skip to main content Skip to Footer


Converting cost to growth in banking

By embracing strategic cost reduction, banks can fund new streams of growth and better compete.


The growth gap

Banks aim to succeed, not merely survive—Accenture Strategy research found that banks are aiming for a return on equity of 11 percent and between 35 and 45 percent of cost-income ratio. While many other industries are taking advantage of a more competitive market to generate revenue and grow, banks’ efforts are often frustrated.

Digital disruption, changing consumer behaviors and new digital entrants are introducing diverse competition. To manage these challenges, banking leaders must seek out greater efficiencies. By embracing strategic cost reduction, banks can fund new streams of growth, restructuring their operations to reach new levels of business competitiveness.


Key Findings

Battle-hardened banks


Banks are facing three cost-related challenges:

Banking executives must link cost reduction and value creation to succeed:


Without “connecting the dots” between cost reduction and value creation, banks have been prevented from taking a holistic approach toward tackling their cost base or reinvesting savings in further value-creation initiatives.

Banking executives must align with each other around cost and growth initiatives:


Competing priorities prevent banking leadership from aligning initiatives that bring about an aggressive cost-conscious culture and create value, in turn putting top-line growth and profitability at risk.

Banking executives must secure the right capabilities for sustainable gains:


Banks need a digital strategy that counteracts the rise of nimble Fintechs. To sustain gains, banks need a capability to formally review the ongoing success of transformations.

To drive profitable growth, companies must take out non-value adding costs and reinvest savings into growth and sustainability initiatives that can aid competitiveness.


Three ways to win


Banks must consider the following actions:

Maintain a holistic approach:


Be aggressive in tackling the cost base. Develop a cost-conscious culture by embracing spend visibility and cost category ownership.

Connect cost reduction and investment decisions:


Reinvest cost savings in initiatives that drive value creation and fuel new growth.

Adopt a digital, agile operating model:


Adopt digital to support new business and operating models, addressing costs throughout the entire bank’s operations.

Banks do not have a moment to lose. Banking executives must adopt a fundamentally different approach to strategic cost reduction now to reclaim profitability.


Raj Chakraborty

Raj Chakraborty
Managing Director – Accenture Strategy, Banking

Robert P. Fuhrmann

Robert P. Fuhrmann
Managing Director – Accenture Strategy, Operations

Connect with Robert P. Fuhrmann Profile on LinkedIn. This opens a new window.
Dotun Aboaba

Dotun Aboaba
Senior Manager – Accenture Strategy, Operations Strategy