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Fixing The Plumbing - Part 1

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Introduction Revenue leakage is an issue well-known to many businesses, including banks. But knowing about a leak and fixing it are different things. With water pipes, big leaks make themselves obvious; finding and repairing smaller leaks can take time and require a specialist. And some leaks only become apparent over time; they may not seem critical, but they can cause damage. If water becomes scarce, leaks cost serious money. To put the metaphor in business terms, revenue (water) has become a much less abundant commodity in banking. Banks that don't actively manage revenue and address leakage forego an opportunity to improve their financial performance and realise other benefits. As we all know, revenue is where the P&L starts. In Part 1 of this two-part series, Zafin Advisory explores what banks have achieved in managing operational efficiency and financial performance. Reducing costs, while necessary, cannot be the only approach. Banks will not achieve their financial goals by means of cost containment alone; investing in revenue management can yield significant returns that have a direct positive impact on operating efficiency. In Part 2 of this series, we will look at some causes of revenue leakage and why it's important for banks to address them. White Paper: Fixing The Plumbing Part 1: Cost/Income And Managing Operating Efficiency George Stein, Partner, Zafin Advisory

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