Cost reduction in the financial services industry has traditionally been cyclical in response to stock market slumps and economic slowdowns. However, now, five years after the crisis erupted, financial institutions remain under huge strain. Market volatility, pressure on profits, low share prices and regulation are forcing organisations to reconsider their cost positions and, in many cases, rethink their business model.
Many firms have already embarked on a range of organisational restructuring and cost reduction programmes with mixed long term results. The key challenge now is how firms achieve more from their cost reduction efforts, and how to do so permanently.
At Deloitte we believe that cost reduction is not a quick fix solution to a short term problem. Firms must take a broader view of the organisation to put aside internal barriers and restrictions to ensure reductions made drive performance improvement and generate shareholder value now and in the long run.
Rather than simply seeking savings by function, transformational cost reduction requires every element of the business to be reviewed and challenged, leaving no stone unturned.
At Deloitte, our capacity to deliver across the full scope of cost reduction programmes - from strategy to execution – sets us apart and we have an established a reputation for designing and implementing cost savings that deliver sustainable result for our clients.
Our extensive experience in designing and delivering cost reduction programmes has led us to identify ten conditions which, when taken together and applied thoughtfully, can significantly increase the chances of delivering a sustainable, cost reduction programme with strategic benefits.
To read more about developing a transformational cost reduction programme, download our publication: ‘No stone unturned: Transformational cost reduction in an era of market volatility’.