The Dutch banking sector is in an extreme transition. Customer needs are changing, regulations are becoming tighter and technological innovations need to be implemented fast. Smart organisations are seizing these developments to reconsider their business models and expanding or optimising their services. What is the best way to do that and how do banks remain agile in a time in which they face so many challenges? 

The rise of FinTech firms

FinTechs are quickly taking market share from traditional banks. To a large extent, their services are based on data gathering which enables them to respond quickly and easily to customers’ changing demands. In reaction to that, existing banks will increasingly need to work with FinTech or adapt their own business models. 

Data gathering to improve processes

Whether the issue is creditworthiness, surfing behaviour or the customer’s income, banks have a surfeit of data available but cannot always utilise the full potential. With the use of new technologies to better check and analyse this data, banks can improve both their own processes and their service to customers. In that sense, banks are in a good position when it comes to creating a large, digital identity.

Techological innovations

New technologies such as Artificial Intelligence (AI) often cause upheaval but also offer a solution to digital trends and changing customer wishes. Already they are much used by newcomers to the sector. For example, chatbots or software capable of performing highly advanced risk analyses. Technologies like AI help existing banks to better serve their customers. Sometimes it means having to rethink their entire strategies.  

Changing regulations

The financial crisis has brought about many reforms and new rules. Now, nearly ten years later, the Basel Committee on Banking Supervision is striving to reach agreement on capital standards. Banks and regulators want to get more grip on the large quantities of existing and proposed new rules. At the same time, new rules are needed to protect consumers and financial stability in the fast-changing landscape. This will mean banks will continue to devote a lot of attention to complying with regulations.

Focus on costs and efficiency

Mature markets are characterised by limited growth and fierce competition. These developments, combined with the current low interest rates, are putting pressure on margins. Banks will have to continue working hard to improve efficiency and develop technological innovation and new ways of working. 

Increased focus on the climate

The government is forcing banks to earn back trust in the sector and focus on improving the environment. For this reason, banks are increasingly engaging with Corporate Social Responsibility (CSR). In doing so, their focus is primarily on consumer protection, the circular economy and climate change.

Expanding regulation

Due to the loss of trust among customers and the intention of getting a grip on the banking system, the banking sector has tightened supervision. This is clearly expressed in prudential supervision (DNB, JSTs, ECB) and is set to continue some years into the future. On top of that, the Financial Markets Authority is demading stricter supervision of behaviour.

Getting the most from these trends

In response to the new financial world, KPMG is heping banks to get their organisations to embrace the above trends and benefit from them. We do that by transforming, developing and evaluating the right operational models and strategies. Some banks will want to implement these transformations gradually. Others are opting for a complete, strategic change. With our extensive experience in audit, tax and consultancy services, KPMG has all the knowledge in-house to support banks in this.