Moving beyond cost reduction in financial services
A variety of forces have put tremendous pressure on the financial services industry in recent years, leaving many institutions with unsustainable cost–income ratios. And several of these challenging trends — from new regulatory mandates to augmented capital requirements to aggressive fintech competitors — are strengthening.
This paper presents the results of PwC’s 2018 Productivity in the Financial Services Sector Survey. It’s part of a series of thought leadership pieces about important issues and opportunities facing the financial services industry and the ways in which senior executives at the most innovative and successful institutions are responding.
As the introduction of new regulatory mandates diminishes and management concentrates on bringing financial institutions’ performance in line with investor expectations, organisations increasingly have sufficient capacity and motivation to tackle the productivity challenge — and many of our clients understand that they should. Institutions tend to need help, though, in acquiring the skills and tools needed to boost productivity.
We at PwC have identified six areas where clients are focusing their productivity efforts. In this report, we’ll outline the actions you can take within each area to achieve positive results:
1. Better understanding the workforce
2. Rethinking change functions
3. Embracing the platform economy
4. Improving workforce digital IQ
5. Bringing an agile mindset to the mainstream
6. Mastering digital labour
Sustainable productivity improvement is imperative for the financial services industry, but it will be difficult to implement.
The transformation will require technology and humans to work together in a fundamentally new relationship, one in which machines take over routine manual tasks but also assist humans in better executing their roles, creating new opportunities for institutions and their employees.
To do this, the employees themselves must be ‘digital,’ and organisations must better leverage the crowd. There’s no one right way to approach the productivity challenge, but concentrating on these six areas is a great place to start the journey.
Global Asset & Wealth Management Leader, Partner, PwC Ireland (Republic of)
Tel: +353 (0) 1 7928719
Global Banking and Capital Markets Leader, PwC United States
Tel: +1 (646) 471-1425
Lara De Vido
Financial Services Marketing, Senior Manager, PwC United States