Cisco Study

In Brazil and Mexico, Banks Can Close a 'Value Gap' Between What Customers Expect and What Banks Are Delivering - Seite 4

Digital transformation in retail banks is a win-win. Digitizing to serve customers with context-aware, relevant advice and services yields substantial revenue uplift to banks. In its Internet of Everything Value Index study, Cisco estimated $1.3 trillion in IoE-related Value at Stake for the financial services industry in the next 10 years. In the financial services sector specifically, 39.5 percent of that value is going unrealized. Yet banks can begin to capture that value today by implementing IoE-enabled technologies to connect people, process, data and things.

Based on analysis for a typical Brazilian financial institution with $5B in revenue, implementing the following technologies could increase profits in the millions of dollars:

• Virtual Mortgage Advisor -- $128M
• Virtual Financial Advisor -- $34M
• Branch Recognition -- $65M
• Mobile Payments -- $46M
• Automated Advice -- $29M

Based on analysis for a typical Mexican financial institution with $5B in revenue, implementing the following technologies could increase profits in the millions of dollars:

• Virtual Mortgage Advisor -- $208M
• Branch Recognition -- $115M
• Mobile Payments -- $80M
• Virtual Financial Advisor -- $44M
• Automated Advice -- $8M

The majority of these benefits accrued (72 percent in Brazil and 82 percent in Mexico) result from increased PBT, while operating cost reduction accounts for 28 percent in Brazil and 18 percent in Mexico. In addition to revenue upside, Financial Services institutions can achieve significant operating efficiencies through automation, technology adoption, improved employee efficiency, and lower customer acquisition costs, for a total of 2.3 percent overall cost savings in Brazil and 2.2 percent overall cost savings in Mexico. By adopting an agile model, Brazilian firms can further save approximately 7.2 percent on IT costs while Mexican firms can further save approximately 7.7 percent on IT costs.