Operational Excellence (OE) - A Key Differentiator In Private Banking - Ready To Take On The Challenge Ahead?
Over the past few years growth and profitability in the private
banking market have been very strong. However, shifting external
conditions are likely to make the future more challenging and
complex. They include intensifying competition and consolidation
emerging technology adoption, increasingly demanding clients and
therefore higher sophistication of the private banking service
offering. Against the background of these developments, what will
it take to grow and sustain revenue while keeping margins at
attractive levels in such an environment?
Taking on the Challenge
To take on the challenges, private banks are pursuing a
multitude of initiatives and strategies for differentiation in
competition. As illustrated below, strategic differentiators are
covering specific sets of these popular private banking
initiatives. Our analysis demonstrates that Operational Excellence
(OE) is the most comprehensive and balanced strategic
differentiator as it is most relevant with regards to coverage of
the initiatives.
Comprehensive and integrated framework - Stakeholders
are shaping and driving the future
Deloitte developed a unique approach to OE especially targeted
at the unique characteristics of private banking. As illustrated on
the right, Deloitte's Operational Excellence Private Banking
Framework covers three dimen-sions: Excellence Principles, Key
Stakeholders, and Building Blocks.
Excellence principles provide strategic
guidance to the bank's development and management from an
operational perspective
Key stakeholders' views have to be
considered to ensure a balance between diverging strategic and
operational targets, as well as frontand back-office functions
Building blocks cover all operational areas
ensuring the framework's comprehensiveness
OE affects most parts of the bank and involves major changes.
Therefore, buy-in and involvement of all stakeholders to the
program is crucial.
Bottom line impact - Unlocking enterprise value
OE is a strategic initiative because its ultimate goal is to
increase the bank's enterprise value by aligning and optimizing
its overall organization, processes, technology and
partnerships.
Deloitte's OE Private Banking Framework increases a
bank's enterprise value. By means of Deloitte's Enterprise
Value Map, the benefits include:
Expectations: OE improves the understanding
and perception of the bank's potential by its stakeholders
Capital: OE reduces the bank's deployed
capital and cost of capital
Operating...
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