Published on July 27, 2016 by
There have been certain watershed events in history that have had far and wide-reaching ramifications on the global economy. The global recession of 2008-09 was one such seismic event whose ripple effect can still be felt. One of its subtle, but key fallouts has been a tectonic shift in global banking.
Bulge-bracket banks are being pressured due to a high cost-to-income ratio, largely contributed by:
- High capital requirements across geographies (post-Lehman crisis)
- Stringent regulatory control
- Complexity in regulations across geographies
- Client advisory becoming expensive
There have been instances of banks finding themselves in an unenviable situation of having to deal with over 500 different regulated activities worldwide. Bulge-bracket banks exiting certain emerging markets and business segments is symptomatic of this global trend, and this has had an impact in the banking pecking order. Relatively free from this global tug of war are local or domestically focused banks, which are now gaining market share. Global Banking in the Midst of Change
This challenge has thrown up an exciting situation of bulge-bracket banks re-modeling their businesses and increasing their focus now more than ever before on:
- Offshoring banking processes and analytics
- Identifying profitable business segments through vendor partnership
- Investing in technology and automation
- Specializing in critical and profitable product segments
- Centralizing processes
Collaboration with specialized knowledge partners is helping banks hold their ground in a volatile global economy. These initiatives are enabling large banks ward off risks, save costs, gain synergies, and be better equipped in the face of global macroeconomic headwinds.
In this scenario, Acuity Knowledge Partners has emerged as a key catalyst and partner to banks across segments by offering cutting-edge specialization, product knowledge, industry expertise, process automation, and centralization services to achieve their longer-term strategic objective of profitability and cost optimization.
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