The banking sector is experiencing massive change and is rapidly building on the power of digital technologies and data analytics, frequently within banking eco-systems. Furthermore, COVID-19 has dramatically reshaped the world in which we live, with tumultuous economic and financial effects running alongside the public health emergency. At the height of the outbreak, banks across the globe played a fundamentally important role, supporting businesses and families by administering government-backed loans, providing additional liquidity and rapidly installing forbearance measures. In many ways, trust in banks is at an all-time high as customers and businesses view them in a new and positive light.
Customer-centric cultures and people strategies within the institutions, alongside intense regulatory scrutiny, are placing resilience and trust at the core of every bank. Digital has been accelerated and continued transformation is now more important than ever. Banks are embracing and enhancing the opportunities offered by digital change to build improved services and better respond to client needs. Challenger banks and new currencies are radically altering the banking environment, boosting competition and creating new business models. Innovative banks understand how changing client demographics, shifting age profiles and growing entrepreneurial businesses will shape long-term banking activities. These banks deliver the right service at the right time. Banks need to maintain and strengthen trust with their customers, and innovation will build a new generation of clients. With some banks following a path of gradual evolution and others opting for a complete strategic change, consolidation in the banking market is potentially around the corner.
With unparalleled experience in Audit, Tax & Legal and Advisory services, KPMG has the depth of knowledge and breadth of skills to guide banks as they harness the power of data and technology, empowering their people to provide a truly customer-centric service. Our Belgian practice of more than 200 professionals, together with our colleagues across 152 countries – with access to global tools and technologies and with the support of competence centers such as the European Central Bank office - draw on deep knowledge from across the banking sector to help banks transform, develop and evaluate the right operating models and strategies to respond to this continuously changing financial world.
Challenges & trends
Business performance & growth
Banking profitability is coming under increased pressure in a sector characterized by persistently low interest rates in an uncertain risk landscape. The COVID-19 pandemic has compelled banks to find new sources to increase performance and growth.
Banks will need to transform their businesses while making use of latest technologies such as robotics and automation to improve their efficiency. Creating new ecosystems will bring additional value to improving the customer journey.
Risk, compliance and regulation
Banks will have to allocate adequate capital to their activities, and this will lead to a continuous reassessment of their business models. Cyber security will remain one of their top concerns. Banks will need to efficiently and effectively stay on top of GRC, with the continued avalanche of new and stringent additional regulations.
Digital transformation is at the heart of this period of rapid change for the banking sector. Investing in the right technology and innovation will mean new business models and enhanced core banking systems.
Changing client expectations
Customers have become more demanding on businesses, including banks, expecting excellent experiences that are hyper-personalized within an omnichannel context. Ultimately, clients expect more ‘value for money’ than ever before. Banks will need to reinvent themselves and the experiences they deliver to their clients.
Banks will have to cope with a continuously changing tax environment with different operational taxes in various jurisdictions that they operate. Moreover, tax authorities have already intensified their attention to transfer pricing. Finally, innovation tax deduction remains an interesting tax planning for banks that are continuously evolving.
The banking sector is under increasing pressure to operate more sustainably and be more transparent about its economic, social and environmental impacts. This has placed more importance on banks to come with long-term sustainability agendas which will have an impact on their business culture as they shift their focus to purpose-driven banking.
Human capital management
Having the right people, with the right skills in the right functions allow businesses to better attract and retain talent while helping to shape the workforce of the future. An effective human capital management strategy will further lead to workforce productivity.
Key Services involved in the Banking sector
Our professionals help financial institutions enhance performance, enable better decision-making and satisfy compliance demands by shaping their risk strategy, improving risk-adjusted performance and implementing pragmatic recommendations.
From a sustainability point of view, our professionals help financial institutions to value and assess the risks not only of their assets but of their total business, hence advising on the optimal capital allocation of the different parts within the financial institutions.
Financial institutions need methodological support and sharing of experiences across sectors. Our professionals help financial institutions to understand, analyze and improve their processes, applying Lean (or similar) methodologies.
Our team of customer advisory specialists help to understand the customer’s needs and transform the way financial institutions deliver value and drive sustainable growth. We are at the heart of every digital transformation.
Our professionals have developed a proven integration & separation approach that helps financial institutions throughout the holistic integration and separation process, structured around key integration/separation modules which allows financial institutions to pick and choose the relevant modules for their situation, minimizing risk and maximizing value.
Our professionals help financial institutions build a truly customer-centric and digital “connected enterprise” based on our differentiating and holistic perspective on customer-led enterprise transformation. In this way, we can support financial institutions from formulating their digital strategy and resulting operating model strategy to the implementation of the different components, leveraging the full set of capabilities within Advisory and Tax & Legal.
We advise banking clients on a broad spectrum of issues as well as through the following integrated solutions
Digitalization and market fluctuations present a lot of challenges for organizations with business executives wondering whether their current processes are ready for the future. Investing in the right technologies allows these processes to become more efficient, agile and competitive.
We help you to maximize value across the entire value chain to keep up with evolutions in the market. By defining your enterprise strategy, improving processes and implementing core technologies, we help you to operate efficiently while exploring untapped potential.
Modern organizations must be agile, competitive and customer-centric. Changing customer expectations, new market entrants, technology disruption and the speed of change have forced brands to reinvent themselves and the experiences they deliver to their customers.
We lead you through a customer-led transformation by improving customer strategies and implementing powerful analytical and digital solutions. This will allow you to unlock your customer value and become a data-driven organization, thriving in the digital age.
Strategies that facilitate the right investments can help organizations grow and develop the necessary agility to respond to changes in the new reality.
Our multidisciplinary team will support you from the strategic conception phase, to deal execution to implementation and post-merger advice. Looking at your ultimate goal and strategy, our team will work with you to determine how a transaction or deal can support your objectives, helping you adapt your strategy and align your purpose and values to complete the transformation process.
Adapting to the ever-changing regulatory landscape in any sector can be challenging and forward thinking leaders see regulatory change as an opportunity, rather than a constraint.
Our solution, driven by a team of multidisciplinary experts, offer a complete approach to help your organization better deal with regulatory changes. With outstanding expertise in compliance, combined with access to technology-driven solutions, we offer a holistic view of the challenges and opportunities on the regulatory horizon.