Banks Shift Gears in Drive for Top-Line Growth

Focus Turns to Customers In the Financial Services Industry

A.T. Kearney

The battle of the banks is taking on new urgency. After spending the past few years fiddling with their cost structures, leading banking organizations around the world are shifting their efforts toward growth - with an eye toward creating value.

Yet while their growth expectations are high, the markets are not cooperating. Low GDP (gross domestic product) and inflation rates in almost every market mean tepid-to-moderate growth for financial institutions. Adding to the challenge, more banks and financial institutions anticipate internal or organic growth to play a leading role in bolstering their top lines. The latter is among the key findings in an A.T. Kearney study conducted by Harris Interactive.

The findings reveal that for most financial services firms, a large percentage of growth will ideadlly come from organic strategies, ranging from 71 percent in North America and 75 percent in Europe to 88 percent in Asia. And while acquisitions will continue to be part of their growth agendas, most of these transactions will be aimed at filling geographic or capability gaps.

In what is essentially a zero-sum game in a mature industry, organic growth strategies depend on the ability to develop customer insights and effectively translate those insights into effective operating models. Nearly two-thirds of survey respondents say that ensuring a good customer experience at every customer touch point is the most critical component of organic growth.

In this paper we highlight the study findings and discuss reasons why organic growth has become a strategy of choice among global financial institutions. We explore why organic growth depends on both acquiring new customers and retaining the loyalty of old customers, and outline how firms plan to implement their organic growth strategies. Finally, we offering recommendations on specific ways to link customer loyalty to improve operations and thereby create and deliver a differentiated customer experience - the foundation for organic growth.

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