Banking transformation: The new agenda

Operational and cost transformation is at the top of the agenda for banks navigating a complex landscape of economic pressure, rising competition, and rapidly evolving customer expectations. With tighter margins and increasing regulatory demands, banks are turning to digital technologies, automation and AI to streamline operations, reduce costs, and enhance service delivery. Yet many banks struggle to deliver on their transformation objectives. Just 18% of banks have been highly successful in achieving their transformation goals.¹

Banking transformation: The new agenda, explains why and — more importantly — how leading banks are achieving success.

Based on a recent survey of 228 banking leaders globally and supported by insights from KPMG’s global network of banking professionals, this report combines data, experience and insights to provide bank leaders and decision-makers with a clear and value-driven view of success.

Banking transformation: The new agenda

How leading banks are driving successful operational and cost transformation

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Notable findings

53% of respondents expect to cut costs by at least 10% by 2030

Anticipated cost savings are significant for banks.

Only 24% have been successful in achieving cost reduction goals

Successful transformation has been challenging.

Just 40% consider themselves well-positioned to implement change management or lead transformation initiatives

Not all banks are ready for change.

What are the most successful banks doing differently to achieve transformative outcomes?

Our research points to a number of key differentiators:

They have clearly defined cost objectives

Banks demonstrating successful transformation initiatives set specific, measurable cost goals that align with their broader business strategy.

Their cost and transformation objectives are ‘fully aligned’

These organisations ensure that cost-saving efforts support — not hinder — their innovation and modernisation agendas.

They have allocated substantial budgets

Business leaders allocate sufficient resources to ensure transformation initiatives are well-funded and sustainable.

They have made leadership accountable

Executive teams are directly responsible for delivering results, fostering a culture of ownership and performance.

Key findings

Know what you want to achieve

Rather than focusing on siloed cost and transformation initiatives, start by understanding who you want to serve, how you want to serve them and what products and services they will need.
Model risk tiering

61% of the surveyed banks have adopted structured model risk tiering frameworks with model materiality, usage, and complexity identified as preferred drivers.
Create alignment between transformation and cost

Be clear about your cost and transformation objectives and help the organization understand the link between operations and efficiency.
Understand the levers of value

While technology can enable and unlock efficiency and simplification, consider all of your routes to transformation.
Drive successful definition and execution across the enterprise

Whether or not your approach to transformation is centralized, make sure you have a hand in driving results, setting and holding leaders and people accountable, and maintaining visibility to the execution and success of various programs across the change agenda.

How KPMG professionals can help

At KPMG we believe transformation starts with people. Our global network of experienced banking professionals provides clients with deep industry knowledge, actionable insights and implementation expertise, helping to realise the full potential of their people and technology, and working together to achieve successful transformation. Because when people and technology are in harmony great things happen.