Reshape: set clear strategy and consistent structure

Global Banking Outlook 2017

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Set clear strategy and consistent structure

Most banks have undergone at least one post-financial crisis strategic review in response to regulatory reforms and the increasingly challenging operating environment, resulting in difficult, though often tactical, decisions about exiting business, customers and geographies, and rationalizing product sets.

Banks now need to focus on positioning themselves to grow profitably by defining a business model, embedding consistency in their operating model and identifying how to drive innovation by participating in an ecosystem of providers.

 

EY - Global Banking Outlook 2017

 

Reshape by defining a new business model

Banks should consider four potential business models as they determine what they want to become:

Local boutiques:

Small and mid-sized domestic banks represents banks that have a core focus on a particular product or service

EY - Local boutiques

Regional champions:

Built on local expertise and a targeted customer base; represents banks that operate major business lines across multiple countries

EY - Local boutiques

Global boutiques:

Provide selected services and products to global clients (e.g., leading M&A advisory internationally)

EY - Local boutiques

Universal super banks:

Truly international in coverage and depth; provide a full range of services to a global customer base

EY - Local boutiques
 

The reshape agenda: an action plan

EY - Global Banking Outlook 2017

Actions for the next 12 months:

  • Identify core strengths: use customer and operational data to support sound decision-making.
  • Identify and deliver preferred business models: answer a series of critically important questions related to purpose, target customers, core products and services, distribution model and innovation strategies.

EY - Global Banking Outlook 2017

Actions for the next 36 months:

  • Reshape legal entity structure: simplify and move to global holding companies that oversee discretely regulated businesses.
  • Define FinTech strategy: choose how to engage with innovative disruptors and FinTech companies in areas of importance.
  • Embed a collaborative mindset throughout the organization: get in position to reduce costs, facilitate regulatory compliance and provide the digital services customers want and expect.