How a Traditional Bank Leveraged Cost Analytics to Compete against NeoBanks

*This is a Success Story related our sister company www.asheranalytics.eu on Oracle EPCM, which is the equivalent product of NetSuite PCM (NSPCM).

In an increasingly digital financial landscape, one top-5 commercial bank in the Americas confronted a stark reality: its traditional cost structure couldn’t compete. Neobanks were operating with 10,000 to 22,000 clients per employee. This bank? Just 500—a staggering 15x efficiency gap.

With over USD 42 billion in assets, 12,000 employees, and operations spanning five countries, the institution lacked clear visibility into cost drivers, profitability by segment, or viable transformation levers. A bold pivot was required—not just in tools, but in mindset.

Enter Oracle Enterprise Profitability and Cost Management (EPCM) + AI Machine Learning, called Smart Profitability and Cost Management (SPCM).

“We weren’t just implementing software—we were reimagining what banking could be in the digital age,” said the CFO.

The Challenge: A Cost Structure Built for Yesterday

Offering a broad suite of products—savings, loans, credit cards, insurance, and investments—across multiple jurisdictions, the bank became increasingly outpaced by more agile digital competitors.

Core issues included:

❌ Lack of cost transparency: No clear separation of fixed versus variable costs; administrative expenses lacked traceability.

🧩 Fragmented planning: Business units operated in silos, each relying on Excel-based methods.

⏳ Slow data integration: Consolidating financial and operational data took over 45 days.

🔍 No scenario modeling: Leadership couldn’t simulate what-if models for decision-making.

🛡️ Outdated costing model: Indirect costs were poorly allocated, with no driver-based logic.

⚠️ Regulatory scrutiny: Three national regulators demanded granular cost attribution and transparency in consumer pricing practices.

According to the bank’s internal governance maturity model, it rated just 1.5 out of 5—between “Initial” and “Basic.” It had no consistent foundation for pricing, performance measurement, or strategic cost control.

“We were making strategic decisions with financial data that was already 45 days old. It was like trying to drive forward while only looking in the rearview mirror,” the Head of Strategic Planning noted.

The Solution: Oracle EPCM with a Service-Centric Design

With support from Asher, the bank implemented a pilot of Oracle EPCM after evaluating competing solutions from SAP and Tagetik. Oracle stood out for its seamless integration with existing infrastructure, flexible modeling, and powerful visualization tools along its Machine-Learning capabilities.

The transformation included:

🔧 Activity-Based Costing (ABC/M) grounded in ITIL®-style service catalogs

💧 Funds Transfer Pricing (FTP) with multi-pull logic and liquidity risk adjustments

🔄 End-to-end integration with Oracle Exadata, Exalytics, core banking, and CRM platforms

🏗️ Governance aligned with COSO ERM, assigning cost ownership tied to risk and control structures

📊 A fully redesigned cost model, built from scratch using target costing and capacity-based drivers

The rollout followed a 25-week, PMBOK®-aligned waterfall approach:

• Diagnostic (6 weeks): Process mapping, and data quality check revealed that 30% of cost data was misallocated
• Design and driver mapping (10 weeks): Overcame resistance from middle management to new logic
• Build and deployment (9 weeks): Required custom APIs to integrate legacy systems

The training was delivered through Oracle University and Asher’s “Learning-by-Doing” framework, both of which are essential for driving adoption.

The Results: Data-Driven Efficiency at Scale

The transformation delivered measurable, strategic outcomes:

⏱️ Data consolidation time dropped from 45+ days to just 3.

💸 20% reduction in back-office transaction costs, saving approximately USD 35 million annually, aligned with APQC benchmarks.

🏦 Optimization of over 700 branches and 3,000 agents via a digitally unified operating model; the branch footprint shrank by 15% with no drop in service levels.

📉 Key performance improvements:

• Cost-to-Income Ratio: improved from 68% to 62%
• Cost per Transaction (CPT): down 22% across digital channels
• Unit Cost per Point of Contact (UCPPC): enabled precise comparisons across digital and physical touchpoints

“For the first time, I can model cost scenarios using current-month data,” said the CFO during a session with the risk team.

But the journey wasn’t without friction:

• During the design phase, IT and Finance disagreed over the service catalog delayed integration by two weeks, requiring a complete project timeline reset.

• The breakthrough came when branch managers used real-time cost-per-transaction dashboards to adjust staffing levels. What began as a finance initiative evolved into an enterprise-wide operational mindset.

Lessons Learned and the Road Ahead

Technology alone didn’t drive change—culture did. By embedding COSO ERM and ITIL logic into everyday operations, the bank instilled a new discipline of cost awareness at all levels.

“We had to stop asking ‘how much did we spend?’ and start asking ‘why did we spend it, and what value did it generate?'” said the Head of Transformation.

Next steps:

• Extend pilots for Oracle Planning and Narrative Reporting for unified budgeting and storytelling.
• Build predictive profitability models at the customer level.
• Execute a roadmap to optimize 30% of the total cost base by 2028.

Conclusions

Profitability isn’t just a metric—it’s a muscle. By rethinking how it understood and managed cost, this traditional bank didn’t just catch up with digital leaders. It carved out a hybrid model all its own—efficient, transparent, and transformation-ready.

“This wasn’t just about adopting new tools. It was about becoming a different kind of bank.”

Want to discuss how SPCM can be applied in your bank ?

Email: info@epm4ns.com

Article written by Pedro San Martín, Principal at Asher | PwC Interamericas pedrosm@asheranalytics.eu