Cash and liquidity management
Delays in receivables and payables will impact the cash flow cycles of banks, leading to a greater need for liquidity and capital planning and better cash management. KPMG can assist with stress testing, cash flow forecasting, working capital optimization, scenario modelling, managing lending availability, balance sheet and cost of fund optimization, as well as ALM strategy review. Furthermore, KPMG can support banks in reviewing and/or defining a contingency funding plan, including remedial actions and escalation protocols for an effective crisis management.
Financial risk review and management
With a significant rise in loan defaults expected, banks are likely to review their financial risks, exposures, credit risk management strategies, and impairments models. They are likely to consider developing sound credit risk frameworks, restructuring existing lending arrangements, and designing macro-economic scenarios used for impairment projection and capital impacts calculation. KPMG can assist with hedging risks strategy identification on credit and market risk, along with review and update of risk appetite statements.
Banks may be forced to re-evaluate the interactions between their internal processes, people, systems and external factors supporting business. KPMG can assist in managing critical processes having higher exposure to emerging operational risks due to changes in the processes and controls after Covid-19.
Cyber and security controls
As more employees access the organization’s systems and information remotely, we can expect a rise in banks requiring more robust security measures with respect to their data, communication and systems.
KPMG can offer support with review of security controls, IT infrastructure upgrades, cyber and data risk management, and ensuring network security and secured remote access.
Consumer demand for digital banking has never been stronger and the opportunity to build a sophisticated digital platform has never been greater. KPMG can assist by providing digital transformation advisory services.
KPMG can assist banks by providing qualified resources for call center support, operational support, IT software delivery, project management and business analysis. In the current remote working scenario, KPMG can also assist banking clients in managing operations across functional areas, such as customer service and redressal and administrative functions.
Business continuity planning
Due to its potential to significantly disrupt the operating environment for FIs, the crisis has sparked a renewed interest in business continuity. Banks would need sustainable business continuity plans in place to mitigate the impact of such crisis in future. KPMG can assist with services such as devising crisis management strategies, assessing IT DR architecture and contingency planning, to ensure that business operations can continue to run smoothly.
The Covid-19 pandemic has led to regular changes being announced related to tax requirements, deferrals and incentives across geographies. KPMG can assist banks in monitoring these changes, evaluating tax obligations, tax modelling and other updates related to direct and indirect tax and transfer pricing.
Debt advisory /restructuring
With the global economy heading towards a possible recession and various businesses on the verge of bankruptcy, banks are likely to receive several applications for restructuring or extension of debt repayments (relief/changes in payment plans).
The regulatory environment within the FS sector is likely to witness upheaval in the coming years with the introduction of new standards and legislation. KPMG can assist the banks in ensuring compliance in a changing regulatory landscape.
Once the pandemic situation resolves and the sector moves towards normalcy, a lot of the deals and on-hold M&A related talks may resume. KPMG can assist with due diligence support and other deal related advisory services.