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Fast Track to Future Ready Banking Operations

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From insights to action, the path to extraordinary value starts here.
Elevate every
decision with
intelligent
banking
oper...

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Intelligent Operations | Banking Industry View
Banks are facing a
world where profit is
being compressed by:
The good news...

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Intelligent Operations | Banking Industry View
Digitally-focused
banks have benefited
from market
valuations that, on
aver...

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Fast Track to Future Ready Banking Operations

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Banks are facing a world where profit is being compressed by:

• Historically low interest rates
• COVID-19 related credit losses
• Patchy economic recovery
• Fintech competition

The good news? Research shows that elevating their operational maturity helps banks outmaneuver the threats that tomorrow poses.

Banks are facing a world where profit is being compressed by:

• Historically low interest rates
• COVID-19 related credit losses
• Patchy economic recovery
• Fintech competition

The good news? Research shows that elevating their operational maturity helps banks outmaneuver the threats that tomorrow poses.

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Fast Track to Future Ready Banking Operations

  1. 1. From insights to action, the path to extraordinary value starts here. Elevate every decision with intelligent banking operations
  2. 2. Intelligent Operations | Banking Industry View Banks are facing a world where profit is being compressed by: The good news? Research shows that elevating their operational maturity helps banks outmaneuver the threats that tomorrow poses. • Historically low interest rates • COVID-19 related credit losses • Patchy economic recovery • Fintech competition Copyright © 2021 Accenture. All rights reserved. 2 Intelligent Operations | Banking Industry View
  3. 3. Intelligent Operations | Banking Industry View Digitally-focused banks have benefited from market valuations that, on average, were 18% higher than less digitized peers in 2019, and 27% higher in 2020. What’s the upside of being future-ready? Note: Values calculated as simple mean of 97 banks with P/BV data in all periods. Source: Accenture Research on S&P Capital IQ data. Source: www.accenture.com/_acnmedia/PDF-102/Accenture-Banking-Does-Digital-Leadership-Matter.pdf 1.05 0.94 2011 Digital focused Digital active 0.99 1.19 1.01 2019 0.83 1.03 0.81 2020 0.75 The rest Price to book value ratio
  4. 4. Intelligent Operations | Banking Industry View In a recent study, we found that while operating model maturity is advancing among organizations in all industries, banks are progressing slower than most. Our research and experience reveals there are four levels of maturity: of banks say they have reached a threshold of “future-ready” operations. 6% With all of these benefits, are more banks moving to a digital operating model? Copyright © 2021 Accenture. All rights reserved. 4 report they have evolved to “predictive” operations. 57% Each level is grounded in and enabled by progressively more sophisticated technology, talent, processes and data insights. Predictive Stable Future-ready Efficient
  5. 5. Intelligent Operations | Banking Industry View This holds true particularly in areas such as AI, analytics and automation. Banks have failed to scale in key innovation areas that measure operational maturity 78% Data 75% 71% Analytics 74% 64% Leading practices 68% 67% Business-technology collaboration 74% 65% Agile workforce 71% 58% Automation 67% 61% Stakeholder experience 65% 57% AI 60% Currently in wide use or at scale (Banking) Currently in wide use or at scale (All industries)
  6. 6. I Intell ntelli igent gent O Opera perati tio ons ns | | B Bank anki ing ng I Indu ndustr stry y View View Data is one of the bright spots for banks This is not surprising given banks have large amounts of data that can be used for identifying customer behavior patterns and targeting appropriate products, such as mortgages and other loans, at competitive prices. Extracting the full value of data takes technology enablement—particularly in areas such as AI, analytics, automation and cloud. 78% of banks use data today widely or at scale — slightly above the 75% cross industry average.
  7. 7. Intelligent Operations | Banking Industry View Three ways to become future-ready: 03 02 01 Know how to leapfrog maturity levels Know the key steps Know the ultimate goal
  8. 8. Copyright © 2021 Accenture. All rights reserved. 8 Intelligent Operations | Banking Industry View Know the ultimate goal 01
  9. 9. Intelligent Operations | Banking Industry View 01 Know the ultimate goal of banks expect business and technology functions to collaborate fully by 2023. 43% are doing this today. 11% In many leading banks the CTO and Head of Operations now report into a single executive who can take a holistic view of how technology can enable an effective operations transformation. Bring business and technology together
  10. 10. Intelligent Operations | Banking Industry View Copyright © 2021 Accenture. All rights reserved. 10 A North American bank wanted to transform its commercial lending process to fund new loans for customers, at a record pace. New digital capabilities, a cloud-based lending origination system, 60 automation tools, AI- assisted assets and predictive analytics transformed the bank’s core systems and strengthened customer retention. By aligning business and technology, the bank accelerated loan approval time by 26% and can disperse loans under US $350K—3X faster. In total, the bank has saved US $20M and avoided potential loss of US $2B. 01 Know the ultimate goal Intelligent Operations | Banking Industry View
  11. 11. Copyright © 2021 Accenture. All rights reserved. 11 Intelligent Operations | Banking Industry View Know the key steps 02
  12. 12. Copyright © 2021 Accenture. All rights reserved. 12 02 Know the key steps 90% of banks expect to achieve widespread or full-scale automation in the next 3 years. Automation is an important way to reduce costs and the most critical factor for the digitization of business processes. “We are automating the easiest of the tasks, such as using enriched, dynamic data [about] personal finance to automate marketing and reporting. This way, clients can make an investment or personal finance related decision on their own without needing the staff.” – A senior banking executive Augment human talent with technology Intelligent Operations | Banking Industry View
  13. 13. Data is at the heart of operational decision making 71% of banks say they designed their operating model based on data rather than on executive experience or intuition. Copyright © 2021 Accenture. All rights reserved. 13 02 Know the key steps It’s a powerful advantage that yields insights into performance measurement and improvement that leads to operational risk reduction, higher compliance and increased customer satisfaction. Intelligent Operations | Banking Industry View
  14. 14. Copyright © 2021 Accenture. All rights reserved. 14 02 Know the key steps 43% of banks reported that cloud delivered the expected cost savings and more than 50% were satisfied with the speed to market resilience achieved. A key opportunity for banks to make different—and better —use of data is improving their ability to scale AI. Banks can improve core processing accuracy and efficiency with advanced AI-powered data and analytics platforms. As banks look to scale AI, the cloud can boost momentum. Boost AI power across the enterprise with the cloud Intelligent Operations | Banking Industry View
  15. 15. Intelligent Operations | Banking Industry View Copyright © 2021 Accenture. All rights reserved. 15 Inefficient lending practices at car dealerships in the Latin American market, were leaving a global bank with high operating costs and low profitability. By moving to an intelligent operating model, the bank replaced manual processes, improved interest rates and loan terms. Today, 20,000 car dealerships, customers, and bank employees have a faster, more satisfying experience. The bank’s loan sales have increased by 50% and its market share jumped from fourth place to first, in just 5 months. 02 Know the key steps Intelligent Operations | Banking Industry View
  16. 16. Copyright © 2021 Accenture. All rights reserved. 16 Intelligent Operations | Banking Industry View Know how to leapfrog maturity levels 03
  17. 17. of banks have seen their ecosystem partnerships improve over the past three years. indicate that they have increased their focus on ecosystem relationships as a result of COVID-19. 38% Intelligent Operations | Banking Industry View Copyright © 2021 Accenture. All rights reserved. 17 Climbing operations maturity just one position can lead to a projected 17% increase in global profits. 03 Know how to leapfrog maturity levels Ecosystem relationships become particularly important, as banks re- think their operations—for example, by changing the operating model, deciding whether to “make or buy,” or by managing people. 41%
  18. 18. Intelligent Operations | Banking Industry View Copyright © 2021 Accenture. All rights reserved. 18 03 Know how to leapfrog maturity levels A European bank wanted to modernize its credit and payment service operations. By embracing intelligent technologies and upskilling its team, the bank’s employees had the data and predictive insights to make better informed decisions and were able to gain control over end-to-end credit card management and non-performing loans processes. As a result, the bank reduced operational losses to zero; cut its total cost of operations by 20-30%; increased operational productivity by 45%; and improved its conformity collateral rate by 90% in the area of credit risk. Intelligent Operations | Banking Industry View
  19. 19. Copyright © 2021 Accenture. All rights reserved. 19 Intelligent Operations | Banking Industry View Copyright © 2021 Accenture. All rights reserved. 19 Banks can lower costs, increase resilience and take the customer experience to the next level with intelligent operations. It’s about reaching future-ready operational maturity to choose smarter, act faster and win sooner. The choice to change
  20. 20. Intelligent Operations | Banking Industry View Copyright © 2021 Accenture. All rights reserved. 20 Learn more at: Accenture.com/FutureReadyBanking Think Scale Put Enhance Foster Build big and go beyond incremental change because digital maturity in operations can be a key profit driver automation, analytics, AI and integrated solutions with leading practices a cloud infrastructure at the heart intuition with the highest- quality, diverse data a specialized human+machine workforce complementary third-party and ecosystem relationships Now is the time to make your move to intelligent operations. Here’s how: Intelligent Operations | Banking Industry View
  21. 21. Intelligent Operations | Banking Industry View Appendix Four levels of operations maturity: Predictive Concentrate mostly on core process improvements and on improving quality and compliance controls. Stable Future-ready Efficient More productive, they incorporate tested methods, such as Lean Six Sigma and process standardization and deploy automation technologies. Focus on how automation can support and augment human ingenuity. They deploy technologies and leading practices with that goal in mind. See increased efficiency and profitability, improved stakeholder experiences and better business outcomes. They are more agile and resilient than others.
  22. 22. DISCLAIMER: This document is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. About Accenture Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services—all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 537,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at www.accenture.com About Accenture Research Accenture Research shapes trends and creates data-driven insights about the most pressing issues global organizations face. Combining the power of innovative research techniques with a deep understanding of our clients’ industries, our team of 300 researchers and analysts spans 20 countries and publishes hundreds of reports, articles and points of view every year. Our thought-provoking research—supported by proprietary data and partnerships with leading organizations such as MIT and Harvard— guides our innovations and allows us to transform theories and fresh ideas into real-world solutions for our clients. Visit us at www.accenture.com/research About Oxford Economics Oxford Economics is a leader in global forecasting and quantitative analysis. Our worldwide client base comprises more than 1,500 international corporations, financial institutions, government organizations, and universities. Headquartered in Oxford, with offices around the world, we employ 400 staff, including 250 economists and analysts. Our best-in-class global economic and industry models and analytical tools give us an unmatched ability to forecast external market trends and assess their economic, social and business impact. Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.

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