In many cases, banks are busy consolidating their duplicative operations and technology infrastructure.
The good news is that despite mixed swings across the industry, in 2005 consumer banks improved their operational efficiency by 4% over the previous year. In the comparative chart between technology and operational efficiency, the vertical axis shows TowerGroup’s IT spending estimates for consumer business segment operations at selected banks, and the horizontal axis reflects their cost-to-income ratio. The diagonal arrow points to an efficiency goal of reducing structural expense with an optimal level of IT investment.
Guillermo Kopp is vice-president of financial services strategies and IT investments at TowerGroup. E-mail: gkopp@towergroup.com
