Improving Flat Lined Revenues And Loan Loss

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Banks Pivot from a Defense to an Offense Opportunities and Process Improvement Posture A solid U.S. banking system is expected, in which it demonstrates stability and continued revenue growth, and nothing short of that is tolerable. It is one of few economic driving pillars key to the country’s ability to create jobs, connect industries at a micro level and business organizations at a macro level, generate government tax revenue, and fortify the economic foundation of the country’s infrastructure. Recent reports have shown that even though U.S. banks have reported significant earnings improvements-improvements mostly attributed to declining loan losses and cost reductions-since the global financial crisis (GFC), banks have not been able…show more content…
As external industry pressures continue to mount, calling for a sustainable U.S. economy, so too have internal industry pressures have mounted as banks get their houses in order to meet current and future product and service demands all while working through government regulation uncertainty. KPMG, (2014) reports how today’s banking industry has reported a seventy percent gain in net income and return on equity since the GFC of 2008, gains captured primarily through business process improvements, writing off toxic assets, and payroll reductions. Furthermore, there will come a time when such improvements and cost reductions will reach their limits, and new revenue generating opportunities will become the dominant banking activity, as time has shown. KPMG (2014) and Ey (2014) go on to explain how the realization of decreasing near term returns are of investors’ concern since 2013 third quarter returns amounted to .99 percent of assets, a decrease of .07 from 2012 and .37 from 2013. As a result, investors and industry speculators question if U.S. banks can actually increase their top line revenue growth in upcoming years while in a defensive posture rather than an offense opportunities and process improvement posture. Connecting With Customers As banks pivot toward accommodating to the needs of their customers, it is important to understand how to
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