Boston, MA, April 22, 2021 – Brown Brothers Harriman & Co. (BBH), today released insights gleaned from interviews with top executives from global financial institutions. It found that banks and financial institutions have shown resiliency in the face of several significant challenges over the last year and that fee compression and near-zero interest rates are eroding revenue. Additional challenges that require investment include regulatory requirements and evolving client expectations. As a result, improvements to operational efficiency to reduce costs and combat revenue pressure was a top concern among respondents. Several avenues are being pursued to optimize cost structures, including outsourcing, shared infrastructure projects, and increased focus on automation of manual tasks, spurred in part by lessons learned during a period of remote work.
32 C-Suite executives representing global financial institutions across Europe, the Americas, and Asia-Pacific were interviewed on how they are preparing for the future following the unprecedented challenges of 2020. Collectively they oversee $35 trillion in assets with 56% representing universal financial institutions and 44% private banks.
“2020 disrupted our industry, causing financial institutions to take a hard look at the way they operate,” said Geoffrey Cook, BBH Partner who leads our service and technology offerings for financial institutions. “But essential lessons were learned through all that disruption, and as they eye a return to normalcy, there is a sense that the actions taken in 2020 will bolster their core offerings for years to come.”
Additional key findings include:
- Digital and data enhancements are a bright spot for product efficiency gains and top of mind for many banks. 41% of respondents are targeting data and digital for efficiency improvements. 25% are shifting into new services, such as alternatives, ESG, and Cryptocurrency.
- Remote work has largely proven to be a success, however 18% of respondents said staff well-being is their number one concern. Leaders are seeking to understand how they need to adapt and evolve to assist and support their employees with work/life balance.
- Real Estate is seen as a top area (22%) to seek expense reductions: Given that nearly all the respondents expect that remote work will continue in some form going forward, many firms are scrutinizing real estate expenses and individual role and responsibilities. This trend is opening new possibilities when it comes to recruiting talent, and the ability to extend beyond the local market.
About Brown Brothers Harriman
BBH is a privately held financial institution that has been a thought leader and solutions provider for over 200 years. The firm serves individuals, families, businesses and institutions in its three business lines: Private Banking, Investment Management, and Investor Services. BBH’s culture of accountability fosters deep and lasting relationships built on commitment, adaptability and trust. The company is independent, selective, and specialized by design.
BBH operates its global business out of eighteen offices located in New York, Boston, Beijing, Charlotte, Chicago, Denver, Dublin, Grand Cayman, Hong Kong, Jersey City, Kraków, London, Luxembourg, Nashville, Philadelphia, Tokyo, Wilmington and Zürich. For more information, please visit www.bbh.com.