Source: BearingPoint

Date: March 2008

Type: White Paper

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Overview: The combination of a depressed housing market, an increase in criteria for loan qualifications, fewer financing options, a decrease in interest rates, mortgage portfolio write-downs and write-offs, and the overall effect of the subprime crisis is forcing banks to re-evaluate how they do business from the top down and bottom up. The industry remains highly regulated and must devote numerous resources to anti-money laundering (AML), the Bank Security Act (BSA) and capitalization requirements promulgated by the Basel II accords and other regulatory bodies. In addition, globalization and technology advancements will continue to drive consolidation in the banking industry. Financial institutions are also under increasing pressure to manage costs aggressively and simultaneously develop operating models that can more easily adapt to fluctuating demand and evolving customer expectations, particularly as they weather through the subprime storm. Banks not only need to continue traditional cost-takeout strategies, they also need to develop a more targeted approach to reducing costs while increasing value. Smart companies will target initiatives within an enterprise performance improvement framework to reduce costs while increasing the value add of core activities, as well as eliminating or offshoring non-core activities. As the banking industry tackles the latest round of challenges presented by current market conditions, leading companies will emerge stronger. Your financial services organization cannot afford to wait to evaluate its cost structure and make sure that all possible strategies have been deployed to improve performance, reduce costs and position itself for profitable growth.

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