COST REDUCTION STRATEGIES IN BANKS

Аннотация

In this article, the strategies of cost reduction are illustrated by using different ways to accomplish the costs of the banks in Uzbekistan. Cost management is a continues process of banking, aimed to bring more benefits. According to Taylor (2017) Cost control encompasses cost reduction as well, which is the sum of business managers' efforts to keep an eye on, assess, and reduce expenses. These initiatives could be informal in character and restricted to a single department within the company, or they could be a part of an official program for the entire corporation. To effectively manage costs, bank managers must possess a solid understanding of legal, accounting, and marketing issues in addition to production and service methods, and commercial bank services. Dopson (2015) Key words: cost control, AI tools, corporate functions, commercial banks, banking Banks are traditional businesses that are averse to altering their ingrained procedures. However, in order to survive the pandemic, even small banking institutions had to implement some level of basic digitalization. With a global recession rapidly approaching, banks are turning to tried-and-true cost-cutting measures like bonus reductions and layoffs. However, cutting employees is not a sustainable strategy because it can lead to unhappiness among workers and the loss of valuable talent. Further, labor expenses only make up a percentage of the costs associated with running a bank. Banks spend almost $1.4 trillion a year on corporate functions, front office work, IT support, and operations. Reducing banking costs effectively necessitates an integrated strategy that carefully restructures personnel, technology, and outside components. Below, some vital parts of reducing cost in banks performance are depictured. They are investing in digital technology, improving workplace productivity, build a clear portfolio and downsize physical workspaces, outsourcing business project management. The foundation of cost-management and revenue-generation strategies is the customer. Millennial clients anticipate excellent digital experiences from online banking platforms and applications. To stay ahead of the competition, banks now need to provide a smooth omnichannel 155 Mart, 2025-Yil customer experience and personalization. Digital processes like big data analytics, generative AI tools, and robotic process automation (RPA) can do the following in addition to enabling a customer-centric model: streamline and automate processes find areas where money is being lost and make embedded finance and banking as a service (BaaS) possible. enable upselling and cross- selling of products; enable focused marketing tactics Permit the segmentation and personalization of customers. Technology is cost-effective in the long run, despite its initial outlay of funds. In the banking industry, reducing costs requires maximizing productivity. You can set short- and long-term goals, reorganize departments, rethink roles, and get rid of pointless procedures with the assistance of a productivity consultant. In order to create a feeling of purpose and raise employee morale, performance management tools like goal-setting, reminders, rewards and recognition, and productivity apps are indispensable. Banks frequently launch new services and products while keeping the same features of previous ones. This results in a large portfolio that doesn't increase the organization's worth or profitability. Banks can focus on relevant products and lower the costs of managing a large portfolio by eliminating redundant offerings. This improves customer satisfaction and increases return on investment (ROI). Significant overhead costs are associated with brick-and-mortar workspaces, such as infrastructure, maintenance, and rent. Banks now have to normalize the hybrid working model, just like other industries. Flexible work arrangements are one of the best-rated post-pandemic cost- cutting and employee satisfaction initiatives. Numerous banks that are performing well contract out non-core services like customer support and IT support to specialized vendors, which results in significant operational cost savings. Banks can increase service quality, maintain operational efficiency, and concentrate on strategic initiatives with the aid of business process outsourcing, or BPO. With the use of digital tools and technologies, Infosys BPM's services for the banking sector can assist banks in transforming their business models, streamlining operations, cutting expenses, and generating value. Our team of more than 10,000 knowledgeable experts and value- added services is capable of supporting both core and non-core banking operations and coming up with creative answers to problems facing the company. It is not anticipated that the work will only save costs. Because defining roles and responsibilities is necessary to make these improvements, the bank's decision-making capabilities should also improve. Although the past two yea