In the next five years, the study predicts, various headwinds in the Thai banking market will put profitability metrics under duress. "Declining profitability will likely influence senior management's decision to undertake further cost structure adjustment in the banking sector." Thai commercial banks, the study says, will be hard-pressed to preserve the current average return on equity (RoE) of 8% as in previous years. To prevent deteriorating profitability, Roland Berger estimates Thai banks need to produce 100 billion baht in cost savings from now until 2024 for late-stage benefits from digital transformation to materialise. THREE APPROACHESRoland Berger recommends banks' management face the cost structure challenge head-on and suggest three complementary and well-proven approaches.

Source: Bangkok Post March 19, 2020 23:48 UTC