About the report

COVID-19 is straining the financial markets and the global banking sector. Banks, at this stage, play a crucial role in maintaining a healthy credit system. They are called to guarantee the necessary liquidity to the real economy, also conveying trust and reliability to end-customers towards a path of recovery. Banking institutions are faced with a series of operational issues, including exceptional losses due mainly to high loan impairments, credit origination and risk management, digital customer relationships and agile commercial models, the drive for operational efficiency and business continuity management as well as funding and liquidity. Achieving cost efficiencies while still maintaining robust cyber security is a complex task at the best of times. COVID-19 has significantly impacted the complexity of this challenge.

As the industry adjusts to the effects of COVID-19 and looks towards the future, the landscape is very different. Banks must negotiate a multitude of shifting factors — from changing customer behaviors to economic headwinds, intensifying competition, regulatory pressures and technological disruption. But while there are challenges, change also brings opportunity. Banks that can drive a truly differentiated proposition — putting the customer experience at the heart of everything they do and connecting it across the enterprise — have the potential to secure a significant competitive advantage.

The report provides an in depth analysis of key discussions on the performance and trends of the 2nd Half of 2020, focusing on the implications of COVID-19 on the financial sector as well as the importance of  “Driving change for a stronger future”.

Ranjani Joseph

Partner - Deputy Head of Audit, Head of Banking Services & Markets

KPMG in Sri Lanka