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Capco, a global business and technology consultancy dedicated solely to the financial services industry, today shared its vision of an
industrialized path to increased ROE, uptake of surplus banking capacity and return to sustainably profitable banking business. Capco is part of FIS™ (NYSE:FIS), the world’s largest global provider dedicated to banking and payments technologies.
Rob Heyvaert, CEO and Founder of Capco and Corporate Executive Vice President of FIS says: “To return to the ROE levels of 15% historically required by investors, banks must now seize the chance to address deep structural issues. Growth opportunity and sustainable value creation demand fresh approaches.”
Stephen O’Sullivan, a Europe-based Partner with Capco, comments: “Banks can no longer do it all, if you want to make it in the years ahead, you have to stop ‘making it all’ today. Look long and hard at existing services and processes. Then identify areas that external expertise and technology can handle more efficiently.”
O’Sullivan adds: “Headcount reduction and tactical cost cutting are no longer sufficient to achieve healthy cost/income ratios. Nor will they enable the break-through innovation demanded to access the unbanked and emerging wealth – crucial to achieve uptake of the sector’s current excess capacity. It is estimated that one of the top eight global banks could be taken entirely out of the equation yet leave enough capacity to meet existing customer demand.”
However, Capco believes that financial institutions enjoy significant advantages, even as the threat of new mobile and social media entrants becomes a reality. While financial services lag behind other major industry sectors when it comes to streamlining processes and collaboration models with partners, the industry does have invaluable experience dealing with data and privacy protection, as well as the burden of ever-evolving regulation. Capco considers that by re-addressing fundamental operating models, institutions can develop more efficient platforms to compete with new entrants in tapping the huge unbanked and wealth in emerging markets opportunities.