Examines bank’s efficiency and productivity across front office, IT, operations, support functions and 3rd party spend.

The Cost Productivity Benchmark enables banks to understand their relative performance on the key drivers of cost efficiency and productivity. It supports the identification of actions and recommends levers to improve cost efficiency.

Why it’s important

Increased competition from digital/fintech challengers, changes in customer behavior along with regulatory pressures have made it essential for banks to focus on sustainable cost reduction.

The Cost Productivity Benchmark provides a holistic view of the cost base and identifies major cost saving opportunities that serve as a crucial input for planning cost reduction or transformation initiatives.

Bank performance:

  • How does our bank perform in terms of the cost-income ratio compared to peers, and what are the drivers behind it?

Front office efficiency:

  • How productive are our front-office FTEs and what should our targets be?
  • Are the contact center FTEs efficient? What are the costs per answered call?
  • Is the front-office staffing mix optimized for the future of the branch, both in terms of costs and FTEs?

Middle office and support functions efficiency:

  • To what extent can we streamline support function costs?
  • Should we strive for a leaner segment management layer?
  • In which functions can we consider centralization to reduce duplication and benefit from synergies?

IT Transformation:

  • What is the bank’s IT spend (OPEX+CAPEX) as compared to peers and how efficient are IT FTEs?
  • How does the bank perform in terms of run-the-bank vs change-the-bank IT spend as compared to peers?

Property footprint:

  • How does the size and staffing of our branches compare to that of peers?
  • Are our branches too expensive relative to peers? Should we consider flexible branch formats?

What the Cost Productivity Benchmark provides

  • Analyzes your bank’s position against relevant local, regional, and global peers
  • Identifies improvement opportunities by tracking both root cause KPIs and outcome KPIs (e.g. offshore and centralized FTEs and outsourcing) instead of pure cost KPIs

  • Provides granular business segment split (retail, private/wealth, SB, corporates, IB) to ensure full comparability and calculate mix-adjusted efficiency ratios
  • Develops an action plan to accelerate performance improvement

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