As the global economy recovers, the banking industry
is at an inflection point – margins will increase again,
but most commentators believe they will not go back
to where they were before. So controlling costs will
become much more important – and with real estate
usually the second largest overhead after salaries,
it will continue to be in the sights of the CFO.
This is all the more pressing as banks have measured
utilisation of real estate and realised that use of buildings at
an average point in time can be as low as 45%, according
to the banks we interviewed. A drive to improve workplace
efficiency as well as effectiveness is leading to the
introduction of agile and new ways of working.
Banks are beginning to use real estate events such as lease
expiries and breaks as triggers for change, re-evaluating
location, space requirements, headcount and the opportunity
for moving jobs to lower cost locations or off-shoring. It is a
blunt tool, but an effective one.
Naturally, front office functions strongly resist the change,
seeing real estate as an inconvenient but necessary cost
burden. Front offices in banks that we interviewed tend to
believe that it is better product and service offerings, as well
as proximity to customers that drives profit – and this has to
be balanced against real estate strategy change. But, they
are now being persuaded to use property in an active way to
drive productivity and profit.
3.2. Cost pressures
22
The future of the financial workplace
|
September 2014
