In spite of having completed about a decade since the economic crisis, most banks in Europe are still struggling to reach their pre-crisis returns. For this recovery a mechanism has been identified by banking experts known as Fit for Growth. It is a mechanism where the banks remain an integral central platform, but its operations are modular. Key processes such as trading, marketing, business analytics, procurement or even some finance functions may now be safely outsourced. This reduces the overheads for the banks. Of course, such outsourcing is always liable to certain risks but the rewards far outweigh them. A major strategic driver for banks’ long-term sustainability will be their ability to build scalable, flexible models to keep up with enormous market changes. All such strategic decisions can be divided into four categories, beginning with the unique “differentiating capabilities”. Another is “table stakes” which are the basics needed, followed by “lights on” that are the daily operations. The last of these is “not required” which as the name suggests is simply are artefacts no longer needed, so must be replaced.

Source:https://www.strategyand.pwc.com/reports/building-modular-bank

Uploaded Date:13 September 2018