Cost reduction remains a priority among financial institutions. Aside from re-negotiating contracts with vendors, consolidating IT applications is an ongoing trend in the industry.
When speaking on the topic of expense reductions, Ralph W. Babb, chairman and CEO of Comerica, said, “We will enhance our technology capabilities, while reducing our overall spend by optimizing our infrastructure and substantially reducing the number of IT applications across the bank.”
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Matt Zames, J.P. Morgan’s chief operating officer, indicated that by 2018 he wants to shrink the number of software applications the company uses by 25%. In 2015, the company was able to cut the number by 13%.
A Financial Times article highlights Deutsche Bank’s initiative to streamline its IT infrastructure in an effort to reduce costs and simplify operations. Having amassed more than 4,400 applications in total, the company had eliminated 500 of them as of the first quarter of 2016.
HSBC also has a grand plan to become a more efficient, cost-conscious financial services provider that can compete on a more even playing field. In the company’s June 2015 investor update, HSBC outlined how it was planning to grow, boost productivity, and streamline operations, all while saving the organization approximately $5 billion. One part of the plan is to get more value out of the current technology, noting that having more systems doesn’t necessarily equate to an increase in efficiency. The company has plans in place to trim 750 applications over the next few years and move many of its non-business-critical systems to the cloud. In the second quarter of 2016, HSBC reported it was on track to meet its cost-savings target, confirming its belief that managing costs throughout the company is essential for long-term growth and profitably.
In our newest thought leadership piece, The Executive’s Guide to Driving Efficiency in Financial Services, we explore:
- How can organizations drive efficiency?
- What initiatives do companies have in place?
- What have been the results of these programs thus far?
Click here to download.