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Future-ready bank

Creating the conditions for banking success in the digital age

OVERVIEW

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Becoming digital natives

The next evolution of banking will be digitally native. Accenture believes, however, that the leap from where most banks are today to becoming a digitally native bank is almost impossible given the complexity, scale and cost of change required.

The future-ready bank is an interim stage with strong economics (an indicative cost-income ratio of 40 percent and ROE of 14 percent) to generate the funding needed for the transformation journey. It will be significantly simplified, much clearer in its purpose and ethics, and far closer to its clients through the use of integrated “big data” analytics.


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While Baby Boomers will pass down US$30 trillion in assets to their heirs, only 47 percent is expected to remain with existing firms.

KEY FINDINGS

RETURN TO STRENGTH
Banks should fix profitability, imbed ethics and revise their approach to growth.


GET FIT
Banks should take a more radical approach to cost transformation by categorizing cost in a meaningful way—creating transparency on what it is and who or what caused it. Doing so acts as a foundation for simplification, operative change (like sourcing models) and—as part of the closed-loop model—zero-based design.


GET IT RIGHT
A focus on ethics and culture can improve short-term financial performance, and provide the foundations for sustained, long-term value creation. Banks should build mechanisms that enable them to manage their people’s competence and intent to make decisions that are right and responsible.


GET CLOSER
Banks need to become better at growth, which will involve greater understanding of the needs and preferences of their existing and potential customers. Banks can take advantage of new tools and capabilities, such as customer journey analytics.

In March 2017, it was reported that the world’s biggest banks have paid US$321 billion in fines since 2008 for a range of conduct failings—from money laundering to market manipulation and mis-selling.

BANKING SUCCESS IN THE

DIGITAL AGE

RECOMMENDATIONS

Leap to the future
To become future-ready, banks should:

  • Adopt a closed-loop approach to cost reduction.
    Incremental changes are no longer enough. Banks need to gain a granular view of their entire cost base and challenge everything.

  • Manage purpose and ethics.
    Establish mechanisms to make visible, and measure, the organization’s ability to make decisions that are in line with its overall values and purpose.

  • Apply new digital tools to spur growth.
    Take advantage of data already being generated and use analytics to make customer journeys for new and existing clients far more insightful, smooth and effective.

LEARN MORE ABOUT ACCENTURE STRATEGY

AUTHOR

CONTRIBUTOR

Markus Boehme        Connect with Markus Boehme on LinkedIn. This opens a new window.





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