Is your bank turning into Ferrari?

Financial services companies are borrowing ideas from motor manufacturers in a bid to cut costs and increase growth.

The inspiration for the new strategy comes from the way car manufacturers use the same processes to build very different products - from cheap runabouts to sports cars - for different customer segments, according to consultancy Accenture.

One example of how this "industrialisation" might work is in lending products and credit cards. Accenture said banks have traditionally handled credit risk assessment on a product-by-product basis.

But because the process of assessing risk is pretty much the same for a mortgage, personal loan or credit card, by creating a single credit risk assessment platform, a bank can significantly streamline its risk assessment process.

A customer's credit history can also be held in a single database, which can eliminate the need to review it each time they are offered a new product.

According to research by Accenture, half of senior executives at major banks in Asia Pacific, Europe and North America are projecting revenue gains of 10 per cent or more from these efforts to increase marketplace differentiation. And a third also expect to see a reduction of 10 per cent or more across their total cost-base from simplifying internal processes.

Noel Gordon, managing director of Accenture's EMEA banking practice, said he was surprised by the depth and breadth of the take-up of industrialisation.

He said in a statement: "With little fanfare, many bankers have come to believe that to beat the competition they needed a new map and a different way of looking at it."

Nine of out 10 bankers surveyed said they are cutting complexity in their processes, and eight out of 10 are simplifying IT systems. Three-quarters are rationalising product offerings and centralising operations. Top aims are to improve sales force effectiveness, to improve customer segmentation and insight, and to create new products.