Banks want to reclaim profitability. Digital disruption, changing consumer behaviors, and new digital entrants are introducing diverse competition. Banks are faced with three cost-related challenges. http://bit.ly/1sPHfm2

1. Converting cost to growth:
Why strategic cost reduction
matters in banking

2. Copyright © 2016 Accenture All rights reserved. 2
The growth gap
Banks want to reclaim profitability
Digital disruption, changing consumer
behaviors and new digital entrants are
introducing diverse competition.
Banks are faced with three
cost-related challenges.
*Source: Accenture Strategy analysis
11%
Banks are aiming for…
Return on equity*
35-45% Cost-income ratio*

3. Copyright © 2016 Accenture All rights reserved. 3
Linking cost reduction and value creation
One of three cost-related challenges
Banks are willing to undertake cost reduction initiatives, but are often
disappointed by the returns.
*Source: Accenture Strategy analysis
of banks prioritize reinvesting cost
savings to align with strategy and
faster return on equity*
of banks intend to funnel
cost savings into growth
initiatives or have an
enterprise-wide strategy
to do so*

4. Copyright © 2016 Accenture All rights reserved. 4
Being aligned around cost and
growth initiatives
Two of three cost-related challenges
Competing priorities prevent banking leadership from aligning initiatives
that bring about an aggressive cost-conscious culture and create value.
64%
of banking executives
said end-to-end
business diagnostics are
by far the most relevant
cost management and
business performance
improvement technique*
of banking executives
have utmost confidence in
their leadership team’s
investment and growth
initiatives*
Only
18%

5. Copyright © 2016 Accenture All rights reserved. 5
Securing the right capabilities
for sustainability
Three of three cost-related challenges
Banks need a digital strategy to counteract nimble FinTechs—global
investment in FinTechs tripled to US$12.21 billion in 2014.
*Source: Accenture Strategy analysis
42%
of banking executives
said digital strategies are
an enabler of advanced
operating models*
44%
of banking executives
said they undertake a
formal review of
investment success*
Only

6. Copyright © 2016 Accenture All rights reserved. 6
Where next?
Banks do not have a moment to lose
By embracing strategic cost reduction, banks can fund new streams of
growth and better compete.
*Source: Accenture Strategy analysis
Take action:
1 Maintain a
holistic approach 2
Connect cost
reduction and
investment
decisions 3
Adopt a digital,
agile operating
model

7. Copyright © 2016 Accenture All rights reserved. 7
About Accenture
Accenture is a leading global professional
services company, providing a broad range of
services and solutions in strategy, consulting,
digital, technology and operations. Combining
unmatched experience and specialized skills
across more than 40 industries and all
business functions—underpinned by the
world’s largest delivery network—Accenture
works at the intersection of business and
technology to help clients improve their
performance and create sustainable value for
their stakeholders. With approximately
373,000 people serving clients in more than
120 countries, Accenture drives innovation to
improve the way the world works and lives.
Visit us at www.accenture.com.
Join the conversation:
@AccentureStrat
To learn more, download the full report:
www.accenture.com/banking-cost-reduction
About Accenture Strategy
Accenture Strategy operates at the
intersection of business and technology.
We bring together our capabilities in
business, technology, operations and
function strategy to help our clients
envision and execute industry-specific
strategies that support enterprise wide
transformation. Our focus on issues
related to digital disruption,
competitiveness, global operating
models, talent and leadership help drive
both efficiencies and growth. For more
information, follow @AccentureStrat or
visit www.accenture.com/strategy.