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Bank Efficiency Essay

733 words - 3 pages

Efficiency enhancement has been a challenge for banks all over the world since years ago. It is proven banks which focus on efficiency enhancement are more organized to fund investments and will benefit from a greater stock-price growth. To improve efficiencies, banks have to carry out an enterprise-wide approach which is time-consuming and may require a change in culture. Besides budgets reduction, processes improvement, freezing expenses and headcount, and reduction of contractors on external, banks are looking forward to improve their performances and qualities time-after-time.

There are numerous ways to boost banking sector’s efficiencies in Malaysia. Firstly, restrictions on ...view middle of the document...

Customers may find it useful and convenient, which in turn gained a good impression and image to the banks. Therefore, banks are encouraged to prepare data or projects effectively with adequate information that focus on decisions of risk management, strategic plans, rules and regulations in implementing systems with information technology and enhancement of technology policies.

Study has shown cost reduction will increase efficiencies and profitability in banking sector. Short-term balancing of strategic plans in reducing cost, with tactical cost management courses in long-term, are useful in helping banks to strive 20% or more in the goal of cost reduction (Accenture, 2010). Cost management programs are mainly organized to reduce operating expenses. Expenses from non-strategic plans can be takeout to help in the tactical cost management programs which are more important. Moreover, changes can be applied on business processes and operating models for the purposes of value maximization, formation of more variable cost structure and cost reductions sustainment. This helps in cost reduction in long-term.

Encourage outsourcing of non-core functions is another way to enhance efficiency. Areas that can be outsourced are low-skill processes that are non-crucial to the strategic positioning of banking...

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