Page 31 - Banking Outlook 2014 - An Industry at a Pivot Point

Banking Outlook 2014: An Industry at a Pivot Point | 29

Getting Going

The U.S. banking industry can no longer cut its way to profit growth. After half a decade focused on
managing risk, cutting costs, and meeting regulatory requirements, the industry must pivot to a strategy
centered on growing revenues. With its reputation badly damaged by the last financial crisis, it will require a
new and unrelenting focus on connecting with customers and regaining their trust. It will require developing
new products and services that appeal to customers, and are available via the channels they want to use.
Ambitious banks will find ways to cater not only to their core customer base, but to the tens of millions of
unbanked and underbanked who are rapidly being co-opted by alternative providers of banking services.
In all cases, it will require that banks rethink their systems and processes to be more agile and to make
their analytical capabilities more insightful. Some institutions may find that the only way to meet these
imperatives will be through mergers, acquisitions, or joint ventures. No matter the course, the way forward
will not be easy, requiring nothing less, for many banks, than a wholesale cultural change. Yet, the alternative
will be even less palatable—a gradual slide into irrelevance, an opportunity missed. The time to begin the
transformation is now.
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