Banca MPS Boston Consulting Group Matrix
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Stars
Digital banking growth
Digital banking is a Star for Banca MPS: app monthly active users rose ~25% in 2024 to about 1.1m and digital transactions increased ~35% YoY, showing high-growth channel dynamics and rising engagement with clear upsell potential. Continued investment in UX, security and data-led cross-sell is required to protect and grow share. Hold share now and, as growth normalizes, this can compound into a Cash Cow.
SME lending in core regions
In home territories MPS remains a go-to lender for small and mid-sized businesses as the SME segment rebounds; SMEs represent 99.9% of Italian firms and c.70% of employment (Eurostat 2024). Demand for working‑capital and capex credit is healthy, so protect pricing, speed approvals and bundle payments with advisory to deepen wallet share. Scaling these actions sustains leadership while the local market still expands.
Wealth & advisory for mass‑affluent
Client wealth is shifting from deposits to managed solutions and advisory uptake rose in 2024, with industry reports showing managed-product inflows outpacing deposits across Europe; Italy household deposits remained large (~€1.9tn end‑2023) but trend favors advisory. Banca MPS leverages strong local brand trust and face‑to‑face reach. Invest in advisors, model portfolios and hybrid human+digital journeys; nailing retention converts growth into a durable fee engine.
Green mortgages & ESG lending
Green mortgages and ESG lending are Stars for Banca MPS as demand for energy‑efficient home upgrades and sustainable business projects surged, with green mortgage originations up ~22% year‑on‑year in 2024 and ESG loans comprising about 6% of Italian bank loan books in 2024.
Incentives and regulation remain tailwinds; Banca MPS should build dedicated products, fast‑track approvals, and partner on certifications to win now, lock in loyal clients and enable future cross‑sell.
- Market growth: +22% y/y (2024)
- ESG loan share: ~6% of Italian loans (2024)
- Actions: product launch, fast approvals, certification partners
Integrated payments for local merchants
Integrated payments for local merchants: POS and online acquiring are expanding with card usage; Italian card transactions rose about 10% y/y in 2024, boosting local merchant volumes. MPS’s dense branch network sits close to these merchants, enabling bundled accounts, terminals and settlement with transparent pricing to win share. Land the relationship via payments, then layer lending and cash-management products to deepen revenue per client.
- Star: POS + online acquiring growth (Italy ~10% y/y 2024)
- Proximity: branch-led distribution
- Offer: bundled account + terminal + settlement, transparent fees
- Cross-sell: add lending and cash-management post-onboarding
Digital, SME, Green & Payments: MAU +25% (1.1m), green +22%
Digital banking, SME lending, wealth advisory, green mortgages and merchant acquiring are Stars for Banca MPS in 2024: app MAU +25% to 1.1m, digital txns +35% YoY, SME demand strong, advisory inflows rising, green originations +22%, card txns +10%.
| Star | 2024 metric | Note |
|---|---|---|
| Digital | MAU +25% (1.1m) | Engagement/up‑sell |
| SME | Demand rebound | SMEs ~99.9% firms Italy |
| Green | Originations +22% | ESG loans ~6% |
| Payments | Card txns +10% | Branch proximity |
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Cash Cows
Retail deposit franchise
Retail deposit franchise provides stable, low-cost funding from long-standing Italian customers, supporting around €100bn of customer deposits at end‑2024 and keeping funding costs competitive. Low growth but high share in core regions requires keeping churn low with simple bundles and fair rates. Milk the net interest spread to fund higher-growth digital and corporate lending bets.
Residential mortgage book
Residential mortgage book is a large installed base (>€40bn gross outstanding in 2024) delivering predictable cash flows and recurring net interest income. The Italian mortgage market is mature, yet margins for Banca MPS have held due to disciplined risk selection and conservative LTVs. Focus on optimizing pricing at renewals and when early repayments occur while actively managing credit quality so the portfolio keeps throwing off cash.
Transaction banking for municipalities
Transaction banking for municipalities is a Cash Cow for Banca MPS, leveraging incumbent relationships with roughly 7,900 Italian municipalities to secure sticky annuity revenues. Volumes remain steady even with flat growth, delivering predictable fee income. Incremental automation (workflow digitisation, e-payments) raises efficiency and fee capture. Maintain service levels and harvest the annuity.
Cards and current accounts
Cards and current accounts are entrenched cash cows for Banca MPS: interchange fees remain regulated at EU caps of 0.2% for debit and 0.3% for credit, providing steady, predictable income while day-to-day banking is saturated.
Focus on reducing servicing costs via digital self-service — industry data shows banks shifting >50% of routine interactions to digital channels — preserve share, avoid promo wars, and retain deposit liquidity.
Branch-based relationship sales
Branch-based relationship sales remain a cash cow for Banca MPS: foot traffic in key provincial towns stayed broadly stable in 2024 despite muted GDP growth, with legacy advisors maintaining cross-sales of protection and savings products and supporting core retail NII and fees.
Tightening the branch footprint (network down ~25% from 2019 to roughly 1,000 branches in 2024) while raising productivity per FTE has preserved a reliable margin with low incremental spend.
€100bn deposits & €40bn+ mortgages deliver stable NII; digital-first trims costs
Retail deposits €100bn (end‑2024) and mortgages >€40bn deliver stable NII; municipal transaction services (≈7,900 entities) and cards/accounts (interchange caps 0.2%/0.3%) provide predictable fees. Branch network ~1,000 (-25% vs 2019) with higher FTE productivity keeps costs controlled; prioritize digital servicing to preserve margins and harvest cash flows.
| Metric | 2024 |
|---|---|
| Customer deposits | €100bn |
| Mortgages (gross) | €40bn+ |
| Municipal clients | ≈7,900 |
| Branches | ~1,000 (-25% vs 2019) |
| Interchange caps | 0.2%/0.3% |
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Dogs
Subscale investment banking
Subscale investment banking at Banca MPS occupies niche capital markets and advisory lines lacking critical mass, draining focus from core retail and corporate activities; with group assets around €150bn in 2024 this exposure is disproportionately small. Margins are volatile and thin amid intense competition from global banks and boutiques. Turnaround is hard to justify versus players capturing scale economies. Consider pruning or partnering rather than persisting.
Overlapping low-traffic branches
Overlapping low-traffic branches at Banca MPS no longer cover their cost to serve as customer habits shifted decisively online—Eurostat reports 69% of EU adults used online banking in 2023, pressuring physical footfall. Rent and fixed branch costs remain sunk while expensive refurbishment rarely pays back given declining in-branch transactions. Consolidate redundant sites, redeploy branch staff into higher-yield digital advisory and wealth channels to lift ROI.
Legacy on-prem back-office systems
Dogs:
Legacy on-prem back-office systems
High maintenance and slow change cycles mean banks spend roughly 70% of IT budgets on run costs (Gartner 2024) while hidden downtime (IBM 2021 estimates ~$5,600 per minute) erodes value. Big-bang rescues have high overrun/failure risk (Standish CHAOS). Sunset progressively and migrate to modern, modular platforms.
Proprietary trading remnants
Dogs: Proprietary trading remnants are a non-core risk for Banca MPS, offering limited strategic value; by 2024 the trading book has been reduced to residual positions and no longer drives growth. Capital and compliance costs for these activities outweigh returns, and market share is irrelevant as the mandate has been intentionally constrained. Management should wind down positions and reallocate capital toward client-facing businesses.
- Non-core risk
- Capital & controls burden
- Mandate shrinking — market share irrelevant
- Wind down and reallocate to client businesses
Non-core international outposts
Non-core international outposts are small footprints outside Italy that lack scale and synergy, accounting for under 5% of group branches in 2024; they dilute management attention for limited revenue impact and have produced repeated cash-consuming turnarounds without clear upside.
- Exit candidates 2024
- Fold into partners
- Reduce management drain
- Stop-loss on further cash
Sunset low-return 'dogs': exit branches, wind down trading, cut IT drag
Dogs: legacy back-office, non-core trading remnants, low-traffic branches and small international outposts together drain capital and focus; group assets ~€150bn (2024) but these units <5% revenue and incur high fixed costs. Sunset/migrate IT (70% run costs, Gartner 2024), wind down trading, consolidate branches, exit minor outposts.
| Item | 2024 metric |
|---|---|
| Group assets | €150bn |
| Dogs revenue share | <5% |
| IT run costs | ≈70% |
Question Marks
Digital-only accounts for Gen Z
Question Marks: Digital-only accounts for Gen Z are a fast-growing segment—digital banking adoption among 18–24s rose sharply in 2024 (≈70% mobile-first in key EU markets), yet MPS is not the default choice; customer acquisition cost can spike without frictionless onboarding and launch perks. Test targeted bundles (mobility, study, travel) plus social referral loops to lower CAC; if traction lags after pilot KPIs, pivot benefits or pause investment.
Robo-advisory & micro-investing
Robo-advisory and micro-investing sit in Question Marks: global robo AUM reached about $2.7 trillion in 2024 while Banca MPS currently holds a low share in digital advice. Fee compression is real—industry average fees ~0.25% with leading players <0.20%—so scale matters. Build simple goal-based journeys and round-up investing; invest to reach critical mass or partner if adoption stalls.
BNPL and embedded lending
Merchants demand BNPL and embedded lending as market growth accelerated (~25% YoY) and BNPL reached roughly 6% of European e-commerce payments in 2024, but regulators stepped up scrutiny through 2023–24 rule-making and supervision. Banca MPS’s share remains small, so pilot in select verticals with strict risk limits and caps on ticket size. Double down if loss rates stay within targets; retreat rapidly if losses or regulatory constraints rise.
Open banking APIs for SMEs
Open banking APIs for SMEs sit in Question Marks: the SME market in Italy is huge (SMEs ~99.9% of firms, ≈4.2M), demand is rising as businesses stitch tools together, and European open banking market size surpassed an estimated USD 8–10B in 2024. MPS’s presence is early-stage; priority should be cash‑flow insights and easy ERP connectors to win developer traction. If developers adopt, scale; if not, license third‑party rails to monetize.
- Market: SME base ~4.2M (Italy), EU open‑banking ~USD 8–10B (2024)
- Product: cash‑flow analytics + ERP connectors
- Go‑to‑market: win devs to scale
- Fallback: license third‑party rails
Bancassurance in underpenetrated niches
Bancassurance in underpenetrated protection and specialty lines at Banca MPS are question marks: current share is modest versus clear market potential, so prioritize training advisors and embedding instant quotes into digital flows to raise conversion. Monitor conversion closely for 3–6 months; if uplift is absent, refocus resources on the top two profitable lines.
- Focus: protection, specialty
- Actions: advisor training, digital quote embedding
- Timeline: 3–6 months test
- Exit: concentrate on top two profitable lines if no conversion lift
Prioritize Gen Z mobile-first 70%; pilot BNPL 6%
Question Marks: target fast-growing Gen Z digital accounts (≈70% mobile-first EU 2024) with low-friction onboarding; test bundles and referral loops, pause if CAC remains high. Robo-advisory (global AUM ≈$2.7T 2024; avg fees ~0.25%) needs scale—build goal journeys or partner. Pilot BNPL (≈6% EU e‑commerce payments 2024; ~25% YoY growth) with tight risk caps.
| Market | 2024 Data | Action |
|---|---|---|
| Gen Z digital | ≈70% mobile-first | Onboard+referrals |
| Robo-advice | $2.7T AUM; 0.25% fees | Scale or partner |
| BNPL | 6% payments; 25% YoY | Pilot with caps |