With the challenges banks are facing these days, it’s becoming clear that banking executives must get the best “bang for the buck” from all resource expenditures. Continued inefficiency at a bank might be robbing important efforts of the resources banks need to be fully successful. But a focus on cutting costs alone is not a formula for long-term success. A balanced approach – one that enables a bank not only to improve operating efficiency but also to upgrade its capabilities to respond to market needs and prepare for the future – is imperative to the success of a bank’s operations and profitability.
Other basic cost-cutting techniques include consolidating vendors and benchmarking costs against comparable services in the market. Bear in mind as well that vendor relationships can have an effect on regulators’ view of the institution’s risk profile.