Wednesday, June 13, 2012

Real value creation in banking

Since the financial crisis and the enduring dangers of the ongoing European debt crisis, the banks are under strong pressure not only to rethink their traditional strategies for growth and value creation but also for regaining trust. Additional industry developments, including consolidation, regulation, industry specialization, changing workforce needs and new technologies, are challenges for banks today. A prominent addition to these challenges seems to be the concept of “industrialization”, which has been discussed since the 90s in the industry itself, but also in the scientific community. Similar to the manufacturing industry, banks focus now on optimizing the whole value creation chain, especially on the improvement of the efficiency of the operational processes and the centralization of their back offices and support functions ( This optimization is obviously an adaptation and transformation of the success of the manufacturing industries, especially the highly rationalized automotive industry. The two large Swiss banks have also committed themselves lately to adapting industrialization processes to their operations (

Industrialization thus promises to reduce costs and improve productivity. But even more important, industrialization in banking offers the chance to rethink a stronger connection to “real” value creation. This means creating value for shareholders, customers and other stakeholders by fostering value chains for innovative solutions. Such operational optimization creates a strong foundation for subsequent sustainable strategic positioning and for people oriented real value creation, which has to follow operational optimization. Leaders in banks today are not only challenged to reduce costs to overcome shrinking margins but also to regain trust. Professionalism at the operational and the strategic level as well as a strong focus on the human side of their business creates trust. ‘Nomen est omen’ for the industry.

 Sybille Sachs

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