After several years of "holding the fort" post-financial crisis, banks are now looking ahead to the future. Pursuing growth and innovation in the current business and regulatory climate can be daunting, but KPMG recently issued a report with some advice on what banks need to do to succeed in both the immediate future and long-term. Here are some of the notable takeaways.
1. Embrace Change
For banks to effectively move forward and continue to grow the business, a culture that is not afraid to embrace change is necessary, KPMG argues. New, more efficient operating models must be sought, and being nimble and innovative is key to success.
"Banking leaders must choose to adapt and evolve, or risk irrelevance," the report reads. "In the future, when banks look back on this time of change, an organization's resilience will not be measured by how much adversity it endured throughout the financial crisis and this period of recovery; rather, it will be measured by how well it adapted to it."
2. Focus on the Customer, Not Products
To increase revenue, banks must figure out which customers to target, which to cut loose, and how to package the products and services customers want, and are willing to pay for, says KPMG. To achieve this level of knowledge about the customer, the firm advises banks to become proficient at leveraging both structured and unstructured data on their existing customers, as well a potential new customers. Doing so may require banks to gather information buried deep down in data mines, as well as in the data repositories of third-party companies, in which case banks need to purchase that data, or partner with those companies and access it.
3. Don't be Afraid of Technology
Bank executives must not look at investment in technology as an unnecesarry or unimportant expense, KPMG says. Legacy systems, in some cases decades old, can hinder the industry's efforts to reduce the complexity of operations, cut costs, and deliver bottom-line improvement.
"The promise of harnessing technology advances can help banks streamline operations to reduce operating costs, connect future and existing customers across a multitude of new and emerging channels, tap new revenue streams, enhance customer loyalty, and build better defenses against cybercrime and denial-of-service attacks," says KPMG.
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Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio