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  1. These are pivotal times for retail banking. As the industry adjusts to the effects of COVID-19 and looks towards the future, the landscape is very different. Banks must negotiate a multitude of shifting factors — from changing customer behaviours to economic headwinds, intensifying competition, regulatory pressures and technological disruption.


In order to be successful, solutions and architectures will require more focus and finesse than simply bolting on new pieces of technology.

Prioritisation of effort in certain areas will make a difference; designing great experiences for customers, putting innovation at the heart of product development and servicing, and creating an ecosystem of partners that can be used to accelerate solutions and increase agility, while being aligned to achieve great customer outcomes.

It is this notion of becoming a connected enterprise that we explore in the content below, setting out the hallmarks of the future of retail banking and how this may manifest itself across what we believe will be the three dominant banking models in the new reality we are entering.

KPMG Connected Enterprise for Banking is our framework and approach for enabling customer-centric, end-to-end digital transformation that meets the new demands retail banks are facing. A future-ready, connected retail bank will have the capabilities to quickly respond to market signals and pivot to capitalise on opportunities as they arise.



Signals of change

New business models emerge

  1. The impact of COVID-19 has accelerated customer expectations and shifted their priorities: they expect frictionless digital experiences, are closely scrutinising value and price, and have become more questioning of brand behaviour on environmental, social and ethical issues.

  1. In the competitive landscape, traditional players are becoming increasingly challenged by a combination of neo-banks and non-traditional participants. Customers will turn to alternative providers if their needs aren't effectively met.

  1. Economically, banks will be more challenged by adverse headwinds arising out of the pandemic in which low interest rates and increased customer defaults impact on margins.

  1. Globally, regulators are likely to take a more interventionist approach and as a result banks will need to be extremely agile in their risk management.

  1. Technologically, there is a clear imperative to continue to invest in digital capabilities and platforms that make it easier for customers to interact and transact and enable greater personalisation or products and services.


To deal with these signals of change, retail banks must develop a business approach which is supported by a connected operating model.

There are five main retail banking business models in the market today:

  1. full-service banks

  2. specialist banks

  3. consumer credit providers

  4. money transfer providers, and

  5. digital wallet providers.



Dominant business models of the future

In the future, we believe three retail banking models will dominate, and a new type of ‘ambient’ bank will emerge.



Strategic imperatives and impacts

The five strategic imperatives

Across each of these models, five strategic imperatives will be to identify and serve customer needs; drive cost efficiency; adopt new and more agile ways of working powered by technology; comply with an increased volume of regulatory change; and carve out a role within the wider ecosystem.

In order to deliver on these strategic themes, KPMG professionals have identified eight capabilities that, together, align the operating model to focus on delivering value to the customer and the business. These are cross-functional and apply across the operating model. In our recent research, conducted by Forrester Consulting, they found over half (52%) of respondents are investing in at least six customer-centric capabilities.

Eight capabilities, twice as likely to succeed

The eight capabilities of the KPMG Connected Enterprise deliver tools, methods and frameworks to achieve a new, better business-as-usual with agility and accelerated innovation.

To learn more, select each capability to access a short summary and corresponding capability factsheet.

  • 2xImpact


Base: 412 professionals involved with customer strategy decisions at retail banking organisations
Source: A commissioned study conducted by Forrester Consulting on behalf of KPMG, September 2020



Case studies

Building and delivering a connected vision

A KPMG firm is working with a multi-national bank in Asia, which has more than 130 million customers across 21 countries, to build a vision for growth that will create differentiation in the marketplace, improving profitability and simplifying and standardising processes across the bank.

Founded on KPMG’s Connected Enterprise framework, KPMG professionals are working with the bank to create an operating model for digital lending that will build a unique customer experience and journey, with a technology architecture and organisational structure to support it. This will include building digitally native products that leverage fintech and cloud native solutions. A multi-functional KPMG team will draw on global credentials and experience to deliver a shared vision for the future.


Framing a connected approach

A prominent retail bank in the UK, was one year into a digital transformation program designed to make it digital first and highly customer responsive —but was struggling to create value from the investments it was making.

Seeing how the eight capabilities of our Connected Enterprise framework mapped strongly to its own aspirations, the bank engaged a KPMG firm to conduct an assessment of its maturity against them. This involved conducting a series of in-depth workshops and developing a compelling transformation plan for the future —which the team then reprioritised as COVID-19 hit. The KPMG team continues to support the bank with a multi-year delivery roadmap, including the build-out of its technology estate and the development and execution of its cloud strategy. Together, we’re framing a connected approach to help achieve the bank’s ambitions.

Our approach

Connected banking is the KPMG framework and approach for enabling customer-centric, end to end digital transformation that meets the new demands retail banks are facing. We help banks deploy the capabilities across the enterprise which provide the greatest value, with a range of configurable SaaS solutions from leading technology providers.

Each of the eight enabling capabilities are underpinned by a set of sub-capabilities. The first step in defining a winning model is understanding your relative maturity in each  against the required maturity to deliver your winning business model. KPMG firms offer three levels of maturity diagnostic depending on the needs of your business.

With the customer at the core, there are five critical questions retail banks should ask themselves:

  1. Are you connecting your customers with compelling value propositions, opportunities and interactions?

  2. Are you connecting and empowering your employees to deliver on the customer promise?

  3. Are you connecting your front, middle and back offices to execute the customer growth agenda?

  4. Are you connecting your ecosystem of business partners to jointly deliver on commitments to customers?

  5. Are you connecting to market dynamics and digital signals?



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