In the years since the global financial crisis, we have devoted a great deal of effort to trying to understand the fundamental changes affecting the financial services industry, and gauging how they might develop in the future.
This latest issue of Banking Insights focuses on what we see as two of the most powerful influences on financial services: the pace and scale of change in the regulatory environment; and the continuing revolution being wrought by information technology, data, and the digital economy.
The pace of change and innovation in the industry is irrefutable, and appears to be accelerating. Meanwhile the impacts of regulatory change and technological innovation are becoming linked in unforeseen and significant ways.
Faced with tighter regulatory requirements, banks are being forced to evaluate their business activities to determine which are still attractive from the point of view of profitability, capital, and liquidity costs. Agile market players are making use of this period of transformation to revamp their business models, sales channels, and products.
Banks, furthermore, are fine-tuning their offerings and cultivating new markets while also meeting the requirements of their clients. KPMG is tracking and analysing the latest developments in the banking sector.
Trust has always been central to the relationship between a bank and its customers. And today, data and analytics offers banks an inherent opportunity to create value and build trust.
Yet, as analytics moves from the back office to the front line, banks will need to ensure that they trust their analytics to ‘do the right thing’ for customers, shareholders, and regulators.
Indeed, just as banks need their employees to act with integrity, they also need their decision engines and algorithms to act with integrity.
In the Trusted Analytics series, KPMG’s John Hall and Mitch Siegel explore the symbiotic relationship between customers, trust, and analytics in banking and find that banks may need to reassess the way they ensure trust in analytics.
“Analytics are typically treated as a ‘black box’ whereas, in reality, organisations need to start thinking about their analytics as independent entities unto themselves; as critical intermediaries between the stakeholders and the organization.” – Mitch Siegel, Principal, Financial Services, KPMG in the US.
We, at KPMG, aim to help keep our banking clients safe, by addressing their regulatory agenda, and successful, by using new technology to boost their business models.