With an increasing focus across the financial services industry on accelerating the move to be digital, organizations must find ways to rapidly prioritize budgets to make room for digital-related investments. For many financial services organizations, a key driver of forward-looking innovation is likely tucked away in the back office. Specifically, third-party supplier budgets and spend is an often-overlooked driver in optimizing and driving value. This activity—when done well—can unlock value quickly to create room for much-needed investment.
While it’s generally accepted that financial services organizations need to enhance their digital capabilities, bank leadership often isn’t offering increasing budgets to address this issue; in many cases, banks have to find the funds on their own.
Among the ways to find those funds, banks can consider evaluating their existing third-party spend. It’s often fragmented, undermanaged, and ripe with opportunities to identify and drive value and cost savings—which can in turn be reinvested in other areas, including digital capabilities.
How much is potentially up for grabs will vary by institution. But when employing this approach at multiple financial services clients, we’ve identified and captured savings of 15% on $300-400 million in contingent labor spend, and savings of upwards of 20% on over $10 million of print-related spend. With the demand for innovation dollars only intensifying, the potential bottom-line savings cannot not be overlooked.
We’ve outlined three steps that banks and other financial services organizations that want to explore this option can begin following: