Today's Lean Banking

To counter stiff competition, UK banks are working harder than ever to get their costs down. Recently headline grabbing cuts underlies a business strategy involving using mergers and acquisitions to capture economies of scale from their staff, IT, and back-office functions.
But banks operating in small emerging markets and in markets with limited M&A possibilities can’t lower unit costs by these means.
Scale isn’t the only route to cost efficiency in banking, however, and some smaller institutions have used more efficient processes to match or even beat much bigger competitors. Can banks in other parts of the world copy these state-of-the-art skills? Gross domestic product per head in emerging markets is much lower, so average customers generate substantially less income for their banks and are proportionately more costly to serve. In addition, most banks in emerging markets such as China & Brazil still process many transactions (mainly payments) by hand—an expensive undertaking.
There is precedent for this view. A decade ago Chilean commercial banks have proved that world-class cost efficiency is indeed possible in emerging markets.

Theme by Danetsoft and Danang Probo Sayekti inspired by Maksimer