Banks are heading into a difficult revenue environment driven by margin compression and deteriorating consumer credit. They now will have to exercise greater cost-management discipline, and CIOs will have to play a leadership role.
A relatively unexamined source of cost is the multiplicity of products and processes in all businesses, often driven by industry consolidation and innovation. CIOs should lead the effort to eliminate these inefficiencies since they bear most of the burden of the "cost of complexity" and their organizations are in the best position to define the streamlining opportunities.
A second productivity opportunity is migrating to a process and applications architecture that is modular, scalable and reusable across products, channels and geographies. Attacking structural issues driving complexity can drive out 25 percent to 30 percent of the cost base. This also will prepare the bank to deal with product and channel proliferation, increased regulatory burdens, and visible channel security demands. Technology executives must be prepared to help shape these agendas.