Finding new ways to tackle expense management is essential for all companies—but especially for financial institutions. As banking income continues to be depressed by low-interest rates and fintech companies increase competition for customers/members services, controlling costs has become key to keeping balance sheets in the black. At Equips, we’ve talked about cost-cutting by streamlining processes and improving efficiencies at financial institutions. These are a big part of expense management, but they aren’t the whole picture.
Ways to trim costs and expenses
The first approach to managing expenses often comes down to reducing whatever costs are delivering the lowest value. At financial institutions, these expenses are often tied to highly specific services that few people use.
As Boston Consulting Group points out in an article:
“Because old products and services need not be eliminated when new ones are introduced, banks tend to build up large portfolios of closely related offerings. And most sell and support them through a wide variety of channels, with separate underlying processes.”
While a wide array of services can help an institution, letting those services grow into a tangled mess over several years can create staffing and technology expenses that quietly drain resources. It’s important to reevaluate existing services, but—in the short term—banks and credit unions should carefully consider how each new service fits the business before adding it or hiring additional staff.
Strategies for Expense Management
Technology and automation continue to be important strategies for managing expenses. However, they are much more complicated than traditional cost-cutting because they require large upfront investments.
As people constantly look for more convenience and instant access, it’s become impossible for financial institutions to meet their 24-hour needs without some automation. Banks and credit unions must consider which services are using up the most staff resources and where new automation can not only reduce costs but also improve the banking experience.
Top economy resources
While reducing total costs is important, it can be far more important to reduce the average cost per customer.
Focusing on resource efficiency was essential during COVID-19, and the lessons from the pandemic are essential for future success. KPMG points this out in one of its articles:
“The pandemic has shifted some factors in a positive direction—the customer migration to digital, lower branch usage, lower cash handling. … The resilience, agility and digital transformation adopted through the initial COVID-19 response must be harnessed to achieve sustainable cost optimization and reinvent operating models.”
With the reopening of an uncertain economy, the resourcefulness required during the pandemic cannot be abandoned too quickly. Banks and credit unions must consider how their efficiency can continue as customers/members return—improving their economies of scale to a level beyond what they were prior to the pandemic.
Ways to manage partnerships
With all the focus on managing expenses, it can be difficult to imagine finding a new way to reduce costs, automate work and take advantage of economies of scale.
However, not every solution requires deep analysis or a large investment. Expert insight and process management can offer options you may not have realized were there.
For equipment management, working with Equips unlocks efficiencies that financial institutions simply cannot invest in on their own. Equips management system simplifies how banks and credit unions schedule equipment repairs and allows for managers to automate routine maintenance.
Equips also provides financial institutions with the advantages of being a large company. We work with your existing vendors, but are able to create discounts with them by improving processing and helping them gain access to more business. This allows Equips to lower your expenses while saving staff time and consolidating reports and billing.
Contact Equips today to find out how we can help improve your expenses by reducing the impact equipment management has on your institution.
Equips is revolutionizing how Banks and Credit Unions manage, maintain, and protect critical branch equipment. Leveraging a network of 500+ vendors, experts at Equips help Financial Institutions respond to equipment problems quickly in one place: Equips.com. Active management allows Financial Institutions of all sizes to improve operational efficiency, cut costs, and streamline equipment inventory and vendor management. Our groundbreaking solution provides clients across 45 states with better insight and transparency into their critical equipment and enables employees to do their best work. To learn more visit equips.com.