Banking institutions around the world are borrowing techniques from the manufacturing sector that are enabling them to simultaneously cut costs and boost growth, according to a new survey from Accenture.

Applying proven approaches from successful manufacturers, these banks are simplifying internal operations and increasing their differentiation in the marketplace – a strategy Accenture calls “Industrialization.”

The concept is inspired by parallels between the banking and manufacturing industries where standardized operating platforms are used to reduce cost and complexity. This approach seeks to address the inefficiency and high costs resulting from years of increasing complexity as banks expanded capabilities, offerings and channels, thus gaining the flexibility needed to develop tailored solutions.

A majority (51%) of senior executives at major banks in North America, Europe and Asia Pacific are projecting revenue gains of 10% or more from efforts to increase marketplace differentiation. One-third (32%) of these executives also expect to see a reduction across their total cost base of 10% or more from simplifying internal processes.

“We began developing our Industrialization point of view after seeing leading banks starting to embrace advanced manufacturing techniques,” explained Trevor Gruzin, managing director of Accenture’s Banking practice in North America and Asia-Pacific, in a news release. “This survey research confirms our theory.”

Gruzin continued: “This has been a quiet revolution. We are working with more than 50 banks on Industrialization engagements and believe we’re at a tipping point. For the last decade, most bankers would admit they alternated between cost-cutting or growth strategies – but almost never simultaneously as they can do now.”

Respondents included senior executives at 107 of the world’s 1,000 largest-asset banks, including half of the top 100 institutions.

Many of the surveyed bankers said they were already funding Industrialization initiatives and expecting significant investment returns. Ninety-four per cent of respondents said they are already investing to improve differentiation, while 92% reported execution initiatives and 87% cited simplification projects.

“We were a bit surprised by the depth and breadth of the take-up of Industrialization,” said Noel Gordon, managing director Accenture’s Banking practice in Europe, Middle East and Africa. “With little fanfare, many bankers have come to believe that to beat the competition they needed a new map and a different way of looking at it.”


The research involved interviews with 107 senior executives in banking institutions in North America (U.S., Canada), Europe (France, Germany, Italy, Netherlands, Spain, Switzerland, UK/Ireland) and Asia Pacific (Australia, China, Japan). The interviews, held between June and October 2005, were conducted by phone or in person.