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In this article, Luiz Zorzella shares the processes of successful strategists.  Financial services leaders often overlook the importance of your decision regarding which segments, markets, channels, and products to focus on. One of the reasons is that, while money moves freely, the effort to build channels, brands, products, trust, relationships, and physical infrastructure, can be humongous. Large insurance companies can take more than a year to implement simple changes to existing products. Thus, short of dramatic strategic moves like divestitures,…
In this article, Luiz Zorzella explains how understanding the net interest margins will better inform your business strategy.   If you are a bank executive and want to manage the bank’s business strategically, you must understand the key drivers of your bank’s profitability and the trade-offs they imply. For example, to some extent, banks can trade the cost of deposits for efficiency ratio by making it more convenient for clients to make deposits. At the same time, the equilibrium of these…
Luiz Zorzella shares an article designed to help improve strategy by understanding your net Interest margin (NIM).  If you are a bank executive and want to manage the bank’s business strategically, you must understand the key drivers of your bank’s profitability and the trade-offs they imply. For example, to some extent, banks can trade the cost of deposits for efficiency ratio by making it more convenient for clients to make deposits. At the same time, the equilibrium of these trade-offs…
  Luiz Zorzella shares a summarized evolution story on Open Banking.  If you are thinking your response to what is happening around Open Banking, this will provide you with some valuable historical context on how events evolved to get us where we are today: It all started with online banking. Before Open Banking, banks thought it would be a good idea to give their clients access to their accounts using the internet.  So, since clients could access their accounts using…
  Luiz Zorzella shares an article on the growth of open banking, the factors that “repress” adoption, and possible solutions.  As you probably know, worldwide, Open Banking is one of the hottest trends in financial services.  Not only is it growing at a breakneck speed, but also its success is inspiring regulators and players in other sectors like finance and insurance who now wonder how to replicate the model. This article is a high-level review of what is happening in…
  Luiz Zorzella shares an article that identifies key insights for improving a service team’s performance and results. If your firm is organized around service teams, you may find that understanding and managing their contribution is difficult. It is not easy because it depends on several logic leaps that sound intuitive but are opaque. For example, you may set goals and even reward them for keeping the clients in their portfolio happy. You may achieve this through a combination of…
  The power of writing a list should never be forgotten. Luiz Zorzella has compiled a six-point list of tools and approaches that improve efficiency.  If you ever thought: ‘Hmmm… wouldn’t it be nice if I had a one-pager list of the tools that people use to improve process efficiency?’ Then today is your lucky day! I have listed below my compilation of the main tools and approaches I found which other executives and consultants use to directly or indirectly…
  Luiz Zorzella takes a leap into the arbitrary world of luck to explain how unforeseen forces should be considered when shaping strategies.  8 months ago, I drafted an article explaining why you should do a sensitivity analysis of your strategy to luck. I was planning to publish it in March of this year, because of St Patrick’s. That draft started with “Now is the time to be bold.”. I pointed out that the largest Canadian banks were trading at…
  Luiz Zorzella takes an adventurous look at two choices innovation-based businesses may or may not choose to pursue to illustrate how emotion is an underlying driver of innovation.  Companies that decide to compete on innovation-based businesses have 2 potential paths to choose from: with or without “emotion”. Years ago, my wife and I traveled to the NorthEast of Brazil. There, we went on a tour on the sand dunes on a buggy. Fifteen minutes into the tour, I was…
  Leadership has its own set of unique challenges during times of crises; Luiz Zorzella provides a post that identifies a few of the common obstacles faced and how to overcome them. During a crisis, we are all pushed to make strategic, life-changing decisions. Often we need to make these decisions under a lot of uncertainty and with incomplete and faulty information. Below, I review some of my favourite cognitive biases with a couple of examples of how they may…
  Luiz Zorzella shares measures on how to mitigate security breaches through cyber attacks during this crisis.  The estimated impact of the Coronavirus Crisis continues to be revised up. Over the past couple of weeks, sequestered trying to minimize the number of fatalities, we have seen economic forecasts being revised, every time painting a more dire scenario. Goldman Sachs and Morgan Stanley, for example, are forecasting a 24-30% drop for US’ GDP on Q2 and a jump in unemployment to…
  Luiz Zorzella shares key points that can help leaders evaluate and address their approach to change to ensure better outcomes.  Strategy & Value For the past 10 years, financial services firms have publicly acknowledged that they needed to change.  Chances are, your organization was one of those. Commoditization meant a systematic erosion of margins for banks; reduction in interest rates has been challenging both interest and non-interest income sources of banks and investment firms as well as the economics…