Cost accountability and margin: structural transformation for a major bank
FINANCIAL SERVICES · OPERATING MODEL · COST
The situation
A major bank faced compressing credit growth, rising funding costs, and low-cost digital entrants, and needed to take cost out of its structure to protect margin. Earlier cost programs had stalled, held back by legacy allocation methods and a heavily matrixed organisation. Central overhead was charged to business lines on a percentage-of-revenue basis rather than what they actually consumed, so accountability sat away from the lines driving the cost. Flat proxy unit costs hid the true cost to serve, and a culture tilted to revenue over margin had produced heavy product proliferation, including several active products with fewer than a hundred customers, and a headcount well above the nearest peer.
The work
We designed an end-to-end accountability diagnostic across product and process, segment and wealth, and channel.
Traced cost movement through the ledgers across multiple core systems, exposing where time and data lags broke the chain.
Audited committee structures to separate who executes from who owns the expense.
Replaced arbitrary internal recharges with driver-based costing, tying product design directly to the back-office capacity it consumed.
Rationalised redundant policy, targeting more than three hundred legacy loan-origination rules, and moved low-complexity retail tiers to digital.
Modelled the run-rate benefit with project capital stripped out, then proved it on an isolated accountability cluster before any wider rollout.
The outcome
A five-stage roadmap from baseline diagnosis to delivery governance.
Cost to serve made visible by product and segment, with the finding that under a fifth of products drove close to four-fifths of segment profit.
A repeatable framework linking change to tracked benefit, with each cost tagged to the decision centre responsible.