Merging bank operations across borders

Information Technology, Management Article, merging bank operations

Article at a glance:

Bank mergers are on the rise in Europe, but the operations and IT systems of most banks are unsuited to integrating new acquisitions efficiently.
The banks' IT and operations are often unnecessarily complex and haphazardly constructed on layers of projects—an architecture that makes it difficult to integrate newly acquired institutions.
Some banks have reduced costs by consolidating to build scale or by offshoring, but few have comprehensively redesigned their entire operating model.
A larger-scale transformation is more difficult but positions banks to make the most of their operations investments and absorb new acquisitions more quickly.

This article contains the following exhibits:

Exhibit 1: Cross-border consolidation is picking up, particularly in Europe.
Exhibit 2: Improving the operating model in several ways together could reduce a bank's operations and IT costs by as much as 40 percent, according to our estimates.
Exhibit 3: To apply the most suitable improvement levers, split banking operations into manageable domains.

This article is part of a special section on improving operations in banking institutions. A related article, "Better operating models for financial institutions," explains the rationale for using a comprehensive operating model perspective to improve processes.