Banks face a near-perfect storm of challenges, including the rising cost of doing business and lower return on equity (ROE) expectations.
New York, NY (PRWEB) April 23, 2012
Global markets have started 2012 on a more positive trajectory, but the sustainability of this run remains the biggest question for banks worldwide. Macroeconomic pressures and regulatory uncertainty are squeezing bank profitability, highlighting the fact that the next 18 to 24 months will likely be the most challenging environment banks have had to face since 2008/2009. According to Ernst & Young’s global banking outlook, Making the right moves: Global banking outlook 2012-13, finding the right path to growth requires a combination of overcoming short-term obstacles and long-term planning.
As bank executives begin to chart their path for growth, the outlook identifies strategies for banks to potentially consider as they continue to navigate a volatile and uncertain global marketplace.
"Banks face a near-perfect storm of challenges, including the rising cost of doing business and lower return on equity (ROE) expectations. But, at the same time, they need to develop and implement new operating models and restore investor confidence," said Steven Lewis, Ernst & Young Director, Global Banking and Capital Markets and author of the outlook. "Banks may be tempted to watch and wait, but that will be a mistake given the rate of recovery varies significantly across industry sectors and geographies."
Steven emphasizes three areas worth investing in to seize opportunities for growth:
1. Renewing focus on the right customers and developing a "whole-customer" view to increase share-of-wallet with current clients;
2. Conducting a thorough review of products, services and markets to define the institution’s core business, and develop new business and operating models; and
3. Deploying technology to aide and differentiate product delivery, improve customer management and strengthen regulatory compliance.
In a video series titled "Top 10 global banking trends" that launched in conjunction with the global banking outlook, Steven added, "The playing field for banks is far from level. As the global banking landscape is redefined, those able to invest will find select opportunities to grow. At the same time, others will become smaller and less complex, focusing on core strengths. In both cases, technology will become increasingly important as both an enabler and differentiator across every part of the organization.”
To download a copy of Ernst & Young's global banking outlook, click here.
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