While banks have benefited from high interest rates in recent years, those rates are expected to decrease while costs continue to climb. As a result, banks worldwide have ambitious savings targets.
According to KPMG International, some are targeting 20 percent to 30 percent over the next two years1. And in the US, more than half say their profitability will grow through cost transformation2.
However, an overfocus on cost could risk underinvestment in key functions contributing to growth. A better approach is to carefully balance cost reduction with value management — by digitizing operations, reducing labor costs, and designing new operating models that get more value from business processes.