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BCG Report – Creating Value in Banking 2009

BCG Report – Creating Value in Banking 2009
BCG Report – Creating Value in Banking 2009

April 21, 2009 Jamie Wodetzki Document Generation  

Over the past 12 months, everyone’s become an expert on the Global Financial Crisis. And there’s no shortage of commentary about how to fix things in the banking industry.

In contrast, Boston Consulting Group has been publishing its annual banking industry report for seven years now. For any Exari customers who haven’t had a chance to digest the contents, here are some of the key takeaways from Living with New Realities: Creating Value in Banking 2009.

Global Issues

  • Global market capitalization has decreased 63% from US $8.8 trillion in Q3 2007 to US $3.3 trillion in Jan 2009.
  • The pre-crisis global titan approach (adopted by the likes of Citibank and RBS) will give way to large vertically integrated banks where common IT platforms and other economies of scale will allow them to keep their cost-to-income ratios at or below 45%.
  • The majority of their revenues will come from traditional universal banking (i.e. retail and commercial), and by doing fewer things better.

Business Banking Operations

  • Improve sales force productivity – productive banks can generate 3.6 times more revenue per sales resource than their peers.
  • Strengthen risk management – goes without saying.
  • Control costs along the entire value chain – differentiate between standard and non-standard credit products. Standard products can be processed efficiently. It can be difficult to know whether non-standard products are profitable on a fully costed basis.

National Banking Sectors

Highest average return on equity (16.5%) achieved in Australia and Spain. Other than Canada (10.7%), ROE in all other major banking sectors in developed markets was below 10% (UK 9.8%; USA 8.3%; Germany -3.8%).

No matter what area of banking you’re in, it’s well worth reading the full report.

And if you want to improve your business banking operations through automation, see how Exari can speed up your processes while reducing costs and risk.


Jamie Wodetzki is Exari’s Co-founder and Chief Product Officer.