In recent years, banks, mostly in developed markets, have been struggling to sustain a competitive edge. On the one hand, cut their operating costs, and on the other, increasing their top line, but due to fierce competition and low margins, have seen little success.
Digital Transformation, and the introduction of advanced analytics, specifically artificial intelligence (AI), are changing this paradigm. By minimizing the dependency on labour intensive tasks, efficiency is increasing in orders of magnitude, processes become thousand times faster and marginal transaction costs are nullified. At the same time, the customer journey is drastically improved, as processes shorten, and interaction becomes personalized.
Return on equity (ROE) in the banking sector has remained subdued since the global financial crisis, averaging 5% in Europe in 2016 and 9% in the US—several percentage points below the average cost of equity. Given the constraints on revenue growth, banks must seek to cut costs—and they have been trying to do so, but to the most are failing to change processes in ways that not only achieve lasting cost reductions but also improve the quality of the customer experience.
ELEMENT™ offers a variety of applications that allows banks to target both the top line and the bottom line, with minimal business disruption, and complete flexibility to adapt to changing needs.