Core banking transformation targeting new levels of efficiency

When making the case for core banking transformation, most banks have focused either on legacy risk mitigation or the increased flexibility and product driven revenue as the target outcome.

Commonwealth Bank of Australia is raising the bar on efficiency, and this might be a game changing approach in the push for banking platform modernization.  If CBA can truly become the “most efficient bank in the world” as they have stated, the entire industry will need to take notice.

The $750 million core banking platform project will allow the bank to reduce its cost-to-income ratio from 39.6 percent to 35 percent in the next three to five years. The target would place Australia‘s largest bank by market capitalization as the most efficient retail bank in the world.

This is a bold target and an opportunity for banks to consider how they rate — but is cost to income the most effective measurement of banking transformation?  Does this approach lend itself towards a focus on automation rather than experience?

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