Nasdaq: Financial Institutions Can’t Cut Their Way to Sustainable High Performance

Total Expert’s General Manager of Banking, James White, wrote an article for Nasdaq to discuss why financial institutions that fail to look at ROI through a strategic lens could be significantly jeopardizing their long-term growth.

Here’s a snippet from the article:

In the past, the average ROI for the S&P 500 was about 10%, although it can vary depending on the industry. Yet financial institutions don’t have a set standard or baseline. They are generally encouraged to aim for an ROI more significant than their cost of capital and the return they can earn from alternative investments with similar risk.

Additionally, most financial institutions do not have a way to accurately measure ROI and time to value. And now, the pressure for accountability is making leaders increasingly nervous about committing to ROI estimates. 

Because of this, many financial institutions revert to their natural tendency, which is using across-the-board cost-cutting efforts to improve operations, hit margin targets, and reset their business. This may be a good short-term strategy, but it has potentially devastating ramifications for long-term growth, customer experience, and investor confidence.

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