A new report reveals that many financial institutions can no longer hope to patch the holes. They need to reinvent.
Customers are becoming more demanding, investors are harder to attract, and the brightest employees are more difficult to keep. The economy looks bleak and competitive pressures are increasing. And one of the hardest hit sectors is the financial sector. Gone are the days when small but incremental improvements were the passport to success.
According to a new report from Deloitte Research, commercial banks, securities firms and insurance companies will need to undergo a radical change of strategies and operations, not only to ensure success, but even to survive. Reinventing Financial Services: Succeeding with Corporate Transformation, examines how some leading companies, including Bank of America, LendingTree.com and MasterCard International have already re-invented themselves.
Acquisitions haven’t delivered
The report reveals that in the past ten years, many companies have tried to grow through acquisitions, but few have actually delivered the cost savings and earnings growth that they expected. In today’s economic climate, this path is even more treacherous. According to Annette Tirabasso, Principal in Deloitte Consulting’s Financial Services Practice, “Now more than ever, firms must abandon this method of convention and adopt one of reinvention. Those that can successfully transform themselves will exceed the expectations of everyone they touch – customers, employees and investors. Firms that don’t will not survive.”
Six key transformations
The report identifies six key transformations that firms can implement:
Rapid deployment: New approaches should allow firms to execute at Internet speed.
E-enablement: Transactions should be moved online. The internet should be integrated throughout the firm.
Streamline processes: Eliminate elements that don’t add value and thus achieve greater customer satisfaction.
Customer centricity: Create a consolidated view of customer relationships to assess profitability and customer needs.
Strategic partners: Turn vendors into strategic partners and so enter new lines of business.
Recreate the model: Think again – are today’s business model’s assumptions really set in stone?
Not a quick-fix
Re-invention is not a bolted on quick-fix. It requires time, commitment and changes that need coordination and planning. But then it doesn’t simply improve existing business – it builds a foundation for the future. Deloitte’s Reinvention Decision Framework tool can help with this.
For a copy of the Reinventing Financial Services report, contact
Rebecca Patrick at Citigate, or visit Deloitte’s web site.