Off late we have seen that shadow banking system is increasingly becoming an important constituent of the financial system and more so in emerging economies. Banks need to innovate, excel and improve their efficiency to remain competitive and not to forget that the role of technology in this regard is very critical.
Growth in the bank of Future can be achieved through operational excellence. This must be accomplished in the market which is getting extremely competitive. While the competition is a fact of life and banks need to be geared up for the same, the competition is going to intensify in the coming days, both from traditional competitors (banks) and also from non-bank entities. Today banks have started calling their branches as ‘STORE’. There is strong need to move on from old way of doing business, Banks need to innovate themselves.
The key to operational excellence is design and performance of integrated systems and processes that create superior strategic, competitive and operational value through speed, flexibility and cross – purpose adaptability
Like in life to move ahead, we need to let go off some old baggage .Let me also mention here that to grow, organizations have to become much more flexible and much lighter on the feet. They can’t be light when they are carrying lots of baggage. We need to get off some bad baggage we are carrying over the period of time and bring operational excellence in those areas.
So for the Bank of Future;
- Why we are talking about Operational excellence?
- Why now?
- What is the way forward?
With the emergence of growing informal financial sector and especially so in emerging markets banks have started feeling the challenge. They have started realizing that, in spite of being in business for centuries a non-existent player has started challenging the entire banking aspect, from speed to convenience. We can see how Telco’s and super markets have started providing banking services.
The time is now ripe for banks to look in to achieving customer excellence more seriously and take initiatives towards that.
The way forward for banks would be to focus on innovation and excellence, which is the way to go. Operational excellence should be able to create tangible economic and operational benefits; when I say tangible, believe me operation excellence does get u tangible results. As per the recent BCG (Boston Consulting group survey) the world’s leading retail banks outperform their peers financially by excelling at operations through;
- Improved customer attraction and loyalty
- Increased revenues and profitability
- Reduced total transaction cost
- Increased competitive advantage
Banks need to look at operational excellence as a measure of the operations performance, excellence and customer satisfaction for Bank of Future to succeed.