After a frantic few years spent implementing copious regulations within tight deadlines, banks can finally focus on strategic topics regarding their business and operational transformation. And in doing so, we can observe the main areas in which banks are taking action.
First, banks are reducing their cost to serve base with a strong focus on profitability and reshaping target operating models. The abiding low-interest-rate environment, essential technology investment, compliance costs and new competitors have forced banks to reconsider their business models and identify cost and income drivers for better decision making. The strategic imperative to predict the most profitable products, clients and regions of the future has evolved the banking landscape. It’s one of the main drivers of the European and Luxembourgish banking sector’s ongoing consolidation trend.
The strategic imperative to predict the most profitable products, clients and regions of the future has evolved the banking landscape. It’s one of the main drivers of the European and Luxembourgish banking sector’s ongoing consolidation trend.
Secondly, geopolitical topics such as Brexit drove reviews of business models and redefined value chains for all European banks at a group level. With its unique ecosystem, skills and capacities, Luxembourg confirmed its status as a favored location to do business across Europe and the globe.
Nonetheless, the banking sector has just started on the transformation road to success. Adapting to the digital age and new technologies is a priority, along with preparing employees to successfully master new ways of working. The challenge to continuously develop required skillsets and ensure efficient data management must be addressed when adopting an agile approach of managing effective transformation projects. Increased efficiency, remaining compliant and enhancing customer experience and value of services continue to make holistic bank management indispensable.