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

A major Canadian bank wanted to implement generative AI and turned to KPMG for its in-depth experience in deploying AI technologies. The bank had already acquired Microsoft 365 Copilot licenses with plans to roll them out to selected users across various functions and business lines. However, the organization faced several challenges, including the need to establish a robust AI governance framework, protect data privacy, and identify appropriate use cases for Copilot integration. These challenges led the organization to engage KPMG to support the rollout and help unlock value from their M365 Copilot adoption.

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.

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.

Five key takeaways

1. 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.

2. Create alignment between transformation and cost

Be clear about your cost and transformation objectives and help the organisation understand the link between operations and efficiency.

3. Understand the levers of value

While technology can enable and unlock efficiency and simplification, consider all of your routes to transformation.

4. Drive successful definition and execution across the enterprise

Whether or not your approach to transformation is centralised, 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.

5. Tap into tested experience

Look for support from experienced professionals who can bring tested methodologies and approaches to the table, particularly when seeking to apply new technologies such as generative AI.

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.