Who has not at least once pronounced this very commonplace statement ?
It could be our (re) elected people’s cup of tea when they undertake to improve services whilst reducing expenses … to the point of wondering why they have not thought of doing it before.
But let us leave the moving sands of politics and let us ask for example the banks to elaborate on their own experience in that matter.
There is a bank ratio to reflect the economic performance
This ratio is called the cost to income ratio.
The cost to income ratio compares operating expenses with the net banking income of the bank.
When the cost to income ratio goes below 60%, the battle for profitability is assumed won for the bank.
Isn’t it a bit too easy?
If he learns that 60% of the margin over the refinancing cost of his credit evaporate as overhead expenses, will the customer feel happy?
And for the other services of the economy, haven’t they taken the habit of unnecessarily burdening their users on behalf of rules, compliance, quality, standards that they have developed for the very purpose of cashing in more proceeds?
The modern world is decidedly an imperfect one …
Dominique F. Pasquier