Efficiency Ratio Optimization for Banks

We predict middle-market banks can use digital technology to topple standards–not just incremental change. Armed with data, we’ll guide the way.

Financial institutions with low efficiency ratios have more flexibility to confront disruption, economic uncertainty, and shifting regulatory requirements. They also have a greater capacity to pursue growth.

While boosting productivity is a top strategic priority for middle-market banks, many are not making gains at the pace of an increasingly digital industry. Productivity is up, but few have achieved an efficiency ratio at or below the traditional 50% industry benchmark. That’s typically the domain of the most digitally enabled institutions. 

The good news is that technologies once out of reach of middle-market financial institutions are rapidly becoming more accessible. Many banks, however, lack the data to pinpoint inefficiencies and target the right opportunities for using technology to improve efficiency and lower efficiency ratios. That’s where we come in.

Drawing on multidisciplinary finance, operations, digital, and customer experience expertise, we understand how to uncover opportunities and design practical solutions with undeniable impact to improve bank efficiency ratios. We helped one $6 billion regional bank model the way to reduce its efficiency ratio by over 12 points within 12-18 months. While all consultants can trim expenses to meet these results, our approach identifies efficiencies while also improving client and employee experience—and mitigating risk to the organization. 

Results You Can Expect

  • Lower your bank efficiency ratio – potentially below the 50% industry benchmark
  • Quantify improvement opportunities based on real benchmarking data 
  • Gain insight for making informed decisions – in just weeks
  • Establish greater capacity to grow profitably
  • Design sustainable improvements
  • Unlock millions of dollars in in new value 

What We Offer

Pinpoint and quantify opportunities to improve efficiency ratio

Our “wall-to-wall” assessment of operations looks across all departments and lines of business. This “bottom-up” analysis helps us pinpoint exactly where your bank has excess costs and unproductive time – in turn allowing more precise solutions for improved efficiency. 

Our unique capabilities capture and analyze data about how associates spend their time – faster, and with greater precision:

  • A technology partnership that collects data through desktop sensors and uses machine learning to deliver dashboards of real-time and ongoing operational performance metrics.

  • A West Monroe Intellio® Insights tool that captures activity data and models the impact of various technology and process initiatives on your efficiency ratio.
  • A rich repository of industry benchmarks for critical KPIs.

Shift your execution strategy to achieve a lower efficiency ratio

We help you think big and set achievable goals for transforming operations – reimagining how all roles, including leadership, can work at a more efficient level. We design change holistically but start small through “test” projects, enabling your organization to learn, adjust, and accrue “wins” faster. This approach builds essential internal alignment around the need to change and new ways of working.

Invest in the right foundational improvements

The key to making significant strides in improving your bank efficiency ratio is through digital technology and intelligent automation. With vast experience deploying transformative technology for financial institutions, we will help you pick digital solutions best suited to your operations – enabling you to eliminate non-value-added activities and improve efficiency. 

Automate and optimize processes

With deep customer experience expertise, we bring a customer perspective to all improvements by transitioning people – employees and customers – to new ways of working. We’ll create a road map for technology and process changes that delivers long-term value – but also quick, smaller wins along the way. Our approach differs from the standard implementation “playbook” in that we work in accelerated, iterative phases to continuously improve your management efficiency ratio.

Scale and grow your institution

While cost cutting alone has the potential to reduce your management efficiency ratio significantly, you shouldn’t lose sight of the ability to lower it through revenue lift. A nimble, scalable organization is primed to take advantage of volume – so we look for opportunities to enhance revenue through new products, enhanced services, or entry into new markets.

Want to learn more?