McKinsey Quarterly is the business journal of McKinsey & Company.
September 2009
Managers in many back-office processing environments can make them more flexible and remove waste by organizing transactions or activities according to their variability.
Although their paths are diverging, all will remain powerful forces in the global economy.
August 2009
With strategic options dwindling, banks that improve their core methods and practices stand the best chance of weathering the storm.
Cecilia Ibru discusses the current challenges of managing a bank in Africa, where the global economic crisis meets an ongoing local crisis of poverty and unrest.
Banks and exchanges are presented with an opportunity sooner than they expected. How should they react?
July 2009
Although the economic slowdown has indirectly affected the region’s banks, they will probably remain profitable and well capitalized.
June 2009
There are good reasons to believe that government intervention today will be far less damaging than past experience would indicate.
Current bank oversight failed to prevent the financial crisis. Let’s not prescribe more of the same.
In this second installment of a three-part series, Professor Richard Rumelt and McKinsey's Lowell Bryan discuss the prospects for the economy, companies, and workers.
Two different kinds of accounting—fair value and hold to maturity—have created two different kinds of crises. One is almost over. The other is only beginning.
April 2009
Om Prakash Bhatt discusses the transformation of one of India’s oldest banks and reveals how he managed to bring the company’s 200,000 employees on board.
The CEO of the former Banco Itaú—and now of Itaú Unibanco—describes the problems of changing a company that is set in its successful habits.
March 2009
Jiang Jianqing discusses the need for balance within an effective governance model and the ways the financial-services industry will change in China in the wake of the global economic crisis.
February 2009
Here’s a plan that could solve the toxic-asset pricing problem voluntarily—without requiring Uncle Sam to nationalize the whole industry—and make (pretty much) everyone a winner.
December 2008
The region has been hit hard but can help the world recover. Meanwhile, the global crisis is likely to spur further integration among Asian markets.
A new regulatory environment for greenhouse gas emissions could hold good news for banks.
The author of The Black Swan explains why the rarity and unpredictability of certain events does not make them unimportant.
August 2008
Even steps that require customization and expert judgement can be streamlined effectively.
Middle-market customers do tend to resist the hassle of forming new banking relationships. But banks that offer them the right products at the right time can change their minds.
US investment banks are cutting costs by shrinking employment, but they can trim other types of spending without causing serious damage to their culture or morale.
As gloom besets capital markets in the developed world, the prospects of emerging ones continue to shine.
July 2008
A shortage of strong internal candidates for critical positions will force European banks to overhaul their talent-management efforts in order to stay competitive and ensure strong growth.
June 2008
Chinese financial institutions are flush with money at an opportune moment. They should resist the urge to build empires and instead focus on advancing their skills and global experience.
May 2008
Despite many uncertainties, the GCC states will probably be able to finance their own investment needs and those of the world economy to boot.
March 2008
Although the outlook for corporate banking is less bright than it has been in recent years, appropriate strategies can still deliver solid growth in the short to medium term.
This small but lively banking market encompasses the region’s largest generation gap in attitudes toward banking.
The exchanges are riding high right now. They should use the proceeds of current good fortune to prepare for an intensely competitive future.
January 2008
Banking around the world may now be passing through a major cyclical correction, but McKinsey research suggests that the industry’s revenues and profits will double by 2016.
December 2007
The Asian financial system could become a full-fledged partner in the global triad of economic powerhouses, alongside Europe and the United States—but only if its regulatory systems, economic ministries, and financial institutions improve dramatically.
Four rising players will continue to grow in wealth and importance, even if interest rates rise and oil prices drop.
November 2007
Treasuries in the developed world have a philosophy very different from the one guiding their counterparts in developing markets, but the two models may be converging.
October 2007
A merger between Southeast Asian exchanges may be unlikely now, but some will fall significantly behind their competitors elsewhere unless policy makers develop consistent policies and regulations across the region.
August 2007
Banks have spent huge sums refurbishing their branches, often without a clear payback. They should devote more effort to managing customer visits.
Leaders used to have few options for changing their companies, except focusing on financial performance and walking the halls. That’s no longer true.
July 2007
McKinsey research shows that the IT investments of banks are most fruitful when they match technology strategy with business strategy, implement systems in a disciplined way, and balance value creation with increased IT capabilities.
The new Markets in Financial Instruments Directive (MiFID) will change the way some European financial firms do business. First movers will have the advantage.
June 2007
Despite inherent risks, talent constraints, and the daunting geographic scope of the market, the Gulf Cooperation Council presents fast-growing opportunities in international investment banking.
Although the region's financial depth is low, Latin America could be on the verge of a breakthrough if policy makers continue reducing public debt and reforming the financial and legal systems.
Despite recent dramatic downturns and the threat of increased regulation, subprime-mortgage opportunities still abound for players that are willing to wait for an upturn and can stomach the attendant risks.
May 2007
China could provide itself with a rural payments system cheaply and quickly by taking advantage of an existing technology and infrastructure.
To go on growing, these institutions must raise their productivity by streamlining the back office.
April 2007
Financial-services executives say innovation is critical, but few companies have embraced best practices.
March 2007
The future prospects of the competitors in Latin America’s banking sector will be determined largely by the bets they place now.
Foreign financial firms should focus on areas where scale and experience give them a competitive advantage.
Lower-income groups in Latin America represent a huge opportunity, but banks must change dramatically to serve them.
Islamic banking remains a niche business, often with relatively few options and poor service for customers. Better regulation could make it more competitive and successful.
Information technology is so crucial for the success of India’s top private bank that K. V. Kamath says he oversees it himself.
January 2007
Local markets are gaining importance for wholesale banking in Asia. Banks must prepare with a new mind-set, new strategies, and even new talent.
Tom Sanzone explains how his broad authority within the company helps keep IT aligned with the business strategy.
Sheikh Salman discusses the current economic and political reforms in Bahrain as the country moves toward a future beyond oil.
It’s tough to profit from cash equities these days—but smart broker-dealers are deploying some of seven tactics that can improve margins.
A new McKinsey study sheds light on the likely winners in the fast-growing global capital markets.
December 2006
Banks and brokerages frequently can reduce operating costs by adopting one or two performance improvement measures. Bigger rewards await those that can conceptualize a broader redesign.
Cross-border mergers and acquisitions are more likely to succeed at banks that have a robust and flexible operating model.
The biggest individual foreign investor in the United States discusses the pace of reform in Saudi Arabia, his investments, and the future of Islam.
November 2006
The CEO of JP Morgan Chase discusses postmerger integration, risk, and leadership.
Roberto Setubal, the chief executive of one of the region's most profitable institutions, talks about its prospects, economic and political risk, and the need to serve low-income consumers.
August 2006
Operational risks are costly, but they can be conquered when high-ranking executives join the battle.
Europe's corporate- and investment-banking industry is thriving after a decade of radical change. Is this as good as it gets, or can it get even better?
Many arenas to profit from—but only with the right skills.
July 2006
The country's financial system must change drastically. Yet the revolution that has already transformed the overall economy suggests that such changes are beginning to take hold.
June 2006
A more efficient financial system could have a profound and far-reaching impact on China's economy.
May 2006
Many companies can turn their inbound call centers into powerful engines for growth.
February 2006
They must reexamine their operations and get ready for more cross-border competition.
January 2006
By restructuring operations and aligning front and back offices, wholesale banks can cut costs dramatically and find new sources of revenue.
Those that get the most value from information technology might be the ones that spend the least on it.
November 2005
A new approach to identifying these individuals is the key.
For those who take a tough stance, such mergers can be lucrative.
October 2005
As competition grows, incumbents must work harder to remain distinctive.
September 2005
John S. Varley speaks to why high performance doesn't necessarily mean a healthy company. Last in a series of interviews with leading executives on change management.
August 2005
Corrado Passera explains his role in two successful corporate transformations. First in a series of interviews with leading executives on change management.
June 2005
The winners in retail banking will speak the language of consumer products: customer service, quality, branding, and market segmentation.
As the changing landscape offers new opportunities, successful companies will choose one of three roles and invest in new capabilities now.
Customers in China seek better service.
May 2005
Only through consolidation will regional market leaders emerge.
February 2005
Bad customer service experiences can translate to lower balances for banks. Service-recovery processes are the key.
Old bad debt hasn’t been fully resolved. New bad debt is piling up. Yet the problems can be cleared up without a systemic crisis.
When crises occur, institutions must deal with not just the original event but also its impact on shareholders.
December 2004
The race is on to make money from individual consumers. Foreign banks had better get into the game.
November 2004
Good risk management is crucial for companies in this opaque market.
Elevating the treasury from a support function to a bank’s primary instrument for managing market risk can have a far-reaching impact throughout the organization.
September 2004
The complexity of payments processes across branches shouldn’t deter banks from streamlining their operations; the potential savings are just too great.
August 2004
The slogan ‘no growth without reform’ has never been more appropriate.
July 2004
Failing banks must overhaul their management and focus on the bottom line if they hope to get back on track.
June 2004
The FDIC—the federal agency charged with promoting public confidence in the US banking system—is enhancing its ability to manage risk.
February 2004
US banks will need to look beyond mergers for growth. Better earnings will have to be won from improved value propositions and productivity.
The accord mostly prescribes good banking practice. Banks should get off the fence and use the new rules to promote change.
December 2003
Retail banking may be cool, but the profits are on the corporate side.
November 2003
Retail banks in Europe could gain much more value from their business customers by focusing on segmentation and losing their "one-size-fits-all" mentality.
Foreign lenders seeking to enter China’s potentially lucrative retail-banking market should first get up to speed in the wholesale one.
Two senior J. P. Morgan Chase executives explain how a worldwide team set the stage for transforming the merged firm’s IT organization.
August 2003
Financial institutions in emerging markets can achieve efficiency through innovative branch formats, extensive outsourcing, and stripped-down operating processes.
The research business is sick. Only better information provided at lower cost will cure it.
June 2003
Credit bureaus could—but don’t—provide Asian lending institutions with vital information for managing the risks they face.
May 2003
To prosper in an increasingly competitive market, retail banks in the Gulf States must evolve from deposits, loans, and transaction services to more sophisticated fare.
Segmented offerings and careful credit risk management will be crucial in markets where a bank’s best customers are young entrepreneurs with few assets and big borrowing needs.
Can insights from behavioral economics explain why good executives back bad strategies?
Turkey’s retail-banking industry soared and then crashed, exposing its weak supervision and governance.
February 2003
The CEO of South Korea’s largest bank discusses his plans to turn it into a world-class financial institution.
Securitization markets in Europe are growing rapidly, but banks have so far had difficulty reaping the rewards.
All three drivers of productivity—innovation, demand, and consolidation—must be exploited to achieve the full benefit of each.
Although investors in distressed debt will probably have to accept recovery rates lower than those of years past, the market does have its attractions.
December 2002
World-class banks manage their back-office and IT activities as a portfolio of individual operations, each demanding a unique solution.
November 2002
A banking crisis crippled Asia’s economies in 1997. A bad-debt crisis threatens to do so again unless governments and banks crack down on nonperforming loans.
When is a good time to make strategic advances? During a crisis, of course.
Money remittance services for immigrants represent a high-margin opportunity for financial institutions prepared to offer them a better deal.
Well-to-do investors in Europe are a hard market to crack. A new segmentation scheme could provide hooks for drawing and retaining them.
August 2002
In the coming wave of cross-border consolidation, banks that keep their potential specialties in mind will probably do better in the long term than those that rush headlong into the first available deal.
May 2002
Contrary to industry folklore, customers are fairly tolerant of changes in the price of retail deposit products. In fact, very often they aren’t even aware of these changes.
Don’t bet the bank on the idea that investment banks can survive the current market only if they merge with commercial ones.
February 2002
Attempts to pursue the middle market through credit offerings and industry and investment-banking expertise may be futile. Cash management is king.
Despite much higher IT outlays by the retail-banking industry, its labor productivity growth rates have actually dropped. What went wrong?
Nonperforming credits are draining the profits of Europe’s banks and industrial companies. Specialized management could not only staunch those losses but also generate attractive profits.
November 2001
Significant changes in the proposed new Basel Capital Accord are needed to avoid placing unintended burdens on banks and discouraging them from embracing the sophisticated risk-management practices it was intended to promote.
August 2001
Telecom-equipment suppliers extended billions in vendor financing to aggressive start-ups and wireless companies. Many of them are now struggling or bankrupt—and their suppliers are suffering, too.
June 2001
On-line banking is almost as popular in Brazil as in the United States. Yet to succeed on-line, Brazilian banks will have to satisfy their increasingly sophisticated and decreasingly loyal customers.
Customers around the world have adopted Internet banking at very different rates. To find out why they vary so much, McKinsey studied 65 leading banks in ten European countries.
Although concerns about security have impeded the expansion of Asian Internet banking, some evidence suggests that it will do well if the basic features—especially bill payment—are handled correctly.
May 2001
Private Social Security accounts will challenge financial institutions, but the opportunity is huge—and may be replicable in other countries as they reform their retirement systems.
December 2000
Bigger institutions are no substitute for internal reform—and could delay it.
November 2000
New entrants are moving into Poland’s retail-banking sector. The most successful of them have launched entirely new retail networks.
August 2000
Japan’s banks are still struggling, but “A world-class challenge for Japanese banking” suggests that they have little incentive to take drastic measures because if they did, most of them wouldn’t survive in their present form.
In many ways, the Internet is a natural home for financial services.
The indifferent performance of virtual banks in converting the public to on-line banking would seem to hand the advantage to their traditional competitors. Yet most incumbents have been slow to meet the on-line needs of their customers.
May 2000
The journey to better credit risk management can take as long as two years to complete, but Asian banks with limited skill and inadequate information can substantially improve their results in just six months.
May 1999
The long-awaited M&A boom is coming, and it will reshape the competitive landscapes of Asian banking. The boldest and best players can emerge as winners, but only if they overcome the unique challenges of M&A in postcrisis Asia.
The region’s banks are mostly small and inefficient. Now that has to change.
November 1998
Raising banks' productivity will take more than one-time cost cuts.
May 1998
An interview with Sir Brian Pitman, chairman of Lloyds TSB.
For retailers, format renewal is fast becoming a recognized means of revitalizing a flagging business by attracting new customers. But, however much banks try, they will be hard pressed to convince droves of consumers to switch to them.
February 1998
In an effort to reduce their costs, banks have undertaken painful branch and staff reduction programs. What has been overlooked, however, is the strong link between the extent to which checks are used as a means of payment and the cost structure of a banking system.
By reducing operating costs, improving pricing, and broadening the functions of ATMs to increase customer demand, banks with large networks could boost incremental profits by $15,000 to $35,000 per machine.
Channels don’t own customers. How far into your bank do you allow the market to penetrate? Rules of the road.
Companies insure against property and casualty loss; why not against rogue trading, new product failure, and other business risks? Business risk insurance should be thought of as a new and efficient source of capital. But banks and insurers will need to integrate and tailor products.
August 1997
A new channel to meet all the financial needs of employees. Convenience and cost will be important, but education could be the key that unlocks latent demand.
Tens of millions of dollars spent with no success. Five myths about database marketing. The pay-off: triple the number of products held per household.
May 1997
Expanding services could easily triple revenues. Acting like Wal-Mart and Ace Hardware could challenge traditional banking’s dominance. Will you end up last on the list of an integrated provider?
New web-based competitors are positioning themselves as trusted, objective intermediaries. Most bank executives are following a “fortress” strategy—defending themselves while they wait for clarity in the on-line world.
November 1996
Their seductive economics hide many failures. What premiums? Savings can amount to 40 percent of an acquisition’s costs. In-store bankers need to walk the aisles. What role in the retail strategy?
May 1996
Should banks and software companies collaborate, or fight it out? Both players have options to redefine relationships between themselves and customers. Trend toward non-exclusive arrangements and standards.
February 1996
Retail banks must provide distribution channels that both accommodate customer needs and address the unfavorable economics of the mainstay branch system. Given the proliferation of channels, this may prove a daunting task.
Despite what Bill Gates says, it’s an archaeopteryx. And like the first bird, each branch is going to have to learn to fly again. First step: unbundling manufacturing and delivery economics.
November 1995
An $84 billion industry is at stake. The first wave of new technology saw banks lose the credit card business. A second wave may benefit companies that control the gateways to electronic payments. Consumer checks are safe, for now.
August 1995
A vast number of nontraditional banks are entering some European retail banking markets. McKinsey groups them into five categories to help incumbent banks better understand the new entrants’ rationales and competitive platforms.
May 1995
Costs are just 60 percent those of traditional banks. Layering electronic channels on top of branches is the wrong answer. Cashing in on three waves of technology.
Banks the world over are asked why they charge their retail customers so much, but UK and German banks show that prices can be more reasonable.
February 1995
Moving toward the same model worldwide. Finally “best practice” really means something. Leading retail banks earned an ROE over 20 percent.
Will the US “bulge bracket” continue its march into Europe? What options for European players? How current pay scales damage the business.
May 1993
A practical guide to rethinking the organization and management of a bank’s credit processes.
Technology and demography are changing the deep foundations on which traditional financial services rest.
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