The reason for peer analysis

The reason for peer analysis

Peer analysis helps firms identify triggers and drivers to understand its business and the market.

illustration of skyscrapers with a line graph above them

In the first year of supervision banks experienced increased frequency of data requests from the European Central Bank (ECB). These requests for data and information have brought about significant change for banks. In the ECB’s effort for harmonization, the data must meet strict requirements with respect to availability, internal consistency and quality.

The ECB has been levelling the playing field while also raising the bar – requiring more detailed data from banks in an effort to achieve harmonisation and stability across the sector. Banks can expect more change as the SSM shifts away from reporting-based supervision towards data-based supervision. The ECB Executive Board agreed in principle to the implementation of AnaCredit in December 2015 and data quality was a stated priority of the ECB for 2016, so banks can be certain that the quantity of both the regular information streams and ad-hoc requests will only increase. With access to bank data across the Eurozone, the ECB can compare banks at all levels of detail and be judged accordingly; and as best practices are established, you can expect the bar to raise again.

Key features that the ECB are looking for with regard to data include:

  • ready access to complete, high quality, reliable and timely data;
  • comparable data across firms, to support system‑wide and peer group analysis – including the construction of relevant peer groups on a cross‑border basis, and to streamline analysis of individual firms;
  • the ability to perform ‘deep dives’ on areas of concern at an individual bank, peer group or banking sector level; and
  • the ability to deploy advanced analytical techniques to detect trends and pin‑point areas of concern, to enable supervisors to be forward looking and proactive.

Peer group analysis by the ECB may lead to extraordinary results and comparisons. With the level of data and detail available to the ECB, and especially in light of their supervisory lens across the banking sector as a whole, they will have ample opportunity to generate novel insights. However, some banks have commented that while the ECB’s expectations of banks was increasing, the level of transparency with respect to the outcome of risk analysis at the institution declined.

With the level of demands increasing, and transparency seemingly decreasing, KPMG heard from banks across the EU that they wanted to understand where they stood compared to other banks. Benchmarking studies offer insights into this, and that is why KPMG’s ECB office conducted various benchmark studies (e.g., SREP and leveraged finance among others), but where the information is limited or in some cases confidential, these studies offer limited insights and visibility across peer groups, let alone a comprehensive view across the region or by country. The data from the EBA transparency exercise provides a baseline for conducting broad analysis, and the EBA even offers an online tool and Excel program to run a basic peer analysis. KPMG has gone a step further to develop KPMG Peer Bank, that offers complex benchmarking and peer analysis using the same indicators being considered by the European supervisors, and over 100 additional ratios to allow deep dive peer analysis. With KPMG Peer Bank, a firm can more easily answer the question of where it stands among its peers, and identify triggers and drivers that will be helpful to understand ahead of its conversations with the ECB.

© 2024 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.

KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Connect with us