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As featured on BusinessMirror: Future of commercial banking

The commercial banking industry is rapidly evolving through digitization, increased competition and tighter regulation. Commercial banks serving small and medium-sized businesses are transforming to compete. So, what will the future commercial banking landscape look like and what should commercial banks do to stay competitive?

In our latest report, KPMG surveyed over 400 commercial banking leaders from around the world who are involved with customer-centric strategy and enablement decisions. We identified key signals of change taking place across the industry, alongside what we believe will be the three dominant future business models in the new reality. To survive and grow in this new reality, commercial bankers should consider how a connected approach, underpinned by technology to support the front, middle and back office, will enable true value from digital transformation.

Signals of change

Commercial banking faces a more complex environment than perhaps ever before. Changes across the industry are forcing banks to review their growth strategy and innovate to remain relevant against client demands, rapid enhancements in digital capabilities, digitization, and new sources of competition.


Commercial banks are building adaptable platforms and ecosystems to provide seamless customer experiences and innovative new products. Successful commercial banks should provide a complete end-to-end experience across multiple integrated channels (including the convergence between pure retail and corporate portals).

Data, digital and technology:

Both financial and non-financial players can thrive in new ecosystems open to integration, greater connectivity and data sharing. Technologies such as distributed ledgers and quantum computing will increase transaction efficiency and enhance information sharing, security, and transparency.


Stakeholders (including public communities) are constantly scrutinizing the impact of banks’ products, services, culture, operations and relationships on people and the environment. Commercial banks consider regulation and governance as the most important factor to earning trust, and 40 percent believe that by building trust with consumers, they can enhance the brand reputation, achieve higher efficiency and more sustainable growth.

Future business models

We believe three business models will dominate the commercial banking market:

1. Re-imagined digital commercial bank

These banks will transform into fully connected digital banks, leveraging capital and data, while commercializing traditional cost centers through the re-bundling of services to offer a full range of hybrid value propositions and banking services to generate new income streams.

2. Banking-as-a-Service

Banking-as-a-Service (BaaS) providers will develop and license services and products and manage user interfaces to provide commercial banking services to end users, through intermediary partners. They will rely on products and services for income streams and deliver them through APIs using a platform-based infrastructure.

3. Platform provider

The platform provider develops infrastructure to enable the commercial banking ecosystem by providing, maintaining or policing a banking platform or ecosystem with either open or closed access for its own and others’ purposes. The platform is a gateway to any number of services and clients, and the technological infrastructure is the main source of income.

KPMG Connected Enterprise

Approaching change means adapting to a connected operating model. The KPMG Connected Enterprise approach is designed to help commercial banking organizations assess their existing capabilities, identify capability gaps, and manage the transformation hurdles across the enterprise to design and embrace their future business models.

Our approach is centered on enhancing all eight connected capabilities across the enterprise to the level that can provide the greatest value. These connected capabilities map to the operating model of a bank and can allow you to prioritize, shape and execute your digital transformation.

KPMG professionals help commercial banks evaluate their maturity across these connected capabilities, shape their transformation agenda and plans, and deploy improvements in the capabilities across the enterprise with the aim of providing the greatest value.

With the consumer at the core, there are five critical questions that commercial banks should ask themselves:

1.    Are you connecting your clients/brokers with compelling value propositions, opportunities, and interactions?

2.    Are you connecting and empowering your employees to deliver on the client promise?

3.    Are you connecting your front, middle and back offices to execute the client growth agenda?

4.    Are you connecting your ecosystem of business partners to jointly deliver on commitments to clients?

5.    Are you connecting to market dynamics and digital signals?

To know more about the capabilities of the KPMG Connected Enterprise in delivering tools, methods and frameworks to achieve a new, better business-as-usual with agility and accelerated innovation, visit: https://home.kpmg/xx/en/home/services/advisory/management-consulting/kpmg-connected-enterprise.html

The excerpt was taken from the KPMG Thought Leadership publication:  https://home.kpmg/xx/en/home/insights/2022/09/future-of-large-commercial-banking.html