The banking industry faces several challenges due to recent economic, geopolitical and regulatory developments. KPMG has identified the top 10 issues facing banks in 2022 and beyond, and in this article we examine the topic of cost optimization.
A driver of profitability and efficiency
Even as bank executives intensify cost transformation programs, our recent research reveals many banks are struggling to make significant headway in digitizing key functions, linking process metrics to key outcomes, and eliminating non-value-add activities.
A recent KPMG survey1of banks identifies several obstacles in making significant headway:
- The cost of the initiatives and the time and stamina needed
- Competing management agendas
- Management turnover, which impedes multi-year programs
- Targeting the right areas to maximize efficiencies
Even so, the bank executives we polled said they are doubling down on their cost efforts
said cost reduction has increased as a strategic priority
are refocusing their cost optimization efforts
are accelerating them