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.
Operational efficiency
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 transformations
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.
Tax environment
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.
Sustainable finance
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.
Improvement of Operational Efficiency
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.
Managing customer in the new reality
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
We believe the future enterprise will be Connected. Powered. Trusted.
Connected. Powered. Trusted. is our definition of a digitally transformed organization. One that is connected, aligned and engineered around the customer. One that is powered by modern technology and agile business practices. One that is trusted by all its stakeholders from customers, employees, suppliers, investors and regulators.
Connected
KPMG Connected Enterprise for Banking is our framework and approach for enabling customer-centric, end-to-end digital transformation that meets the new demands banks are facing. A future-ready, connected bank will have the capabilities to quickly respond to market signals and pivot to capitalize on opportunities as they arise. KPMG Connected Enterprise focuses every critical process, function, and relationship of a business on meeting customer expectations, creating business value and driving sustainable growth in a digital world. KPMG Connected Enterprise for Banking is an insight-led, customer-centric, enterprise-wide approach to digital transformation.
Powered
KPMG Powered Enterprise is an outcome-driven, functional transformation solution that combines deep industry knowledge, global delivery capability, and market-leading cloud technologies. It helps drive sustainable change, raising performance and creating lasting value for your business. Powered Enterprise is our key service offering for functional transformation in the cloud. It is an integrated, market-leading solution that is transformational for business functions including Marketing & Sales, Procurement, Finance, Human Resources and Information Technology.
Trusted
The Trusted imperative embraces and represents the entirety of KPMG’s capabilities in risk and regulation. It also asserts an enabling, multiplying role for Trusted thinking in digital acceleration and transformation. We believe trust is the ultimate business enabler: growth, performance, efficiency, and innovation are all fueled and facilitated by the confidence that people have in their bank.
