Industries

Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Digital assets: The path to success

Considerations for banks offering digital assets to customers.

The banking industry faces several challenges due to recent economic, geopolitical and regulatory developments. KPMG has identified the top 10 issues facing banks in 2022 and beyond, and in this article we examine the topic of digital assets.

No longer a fringe element

With crypto currencies and other digital assets becoming attractive among retail and business customers as an investment, these instruments no longer represent a fringe element in the industry.

Banks that stay on the sidelines may be missing an important moment – so long as they are prudent when entering the marketplace.

Though they are complex and mystifying to many, cryptoassets represent $2 trillion in market value with roughly 200 million users.1That said, bankers would be wise if they view them through the lens of trust, transparency, and auditability.

Dive into our thinking:

Shifting to a higher gear

Download the full report to learn about all of the key issues impacting banks in 2022 and beyond

Download PDF

Taking Action in 2022 - Digital Assets

Click on each section below for actionable steps you can take now
Understand the customer need
  • Understand the customer need
    Knowing which digital assets to offer customers is critical. Making the right decisions in that regard means weighing the risks and rewards of providing such products and services directly or, if it makes more sense, in partnership with another organization. At the same time, among the questions to consider before entering the deep waters of digital assets is the extent to which a bank must modernize it custody models, due to the finality of transactions settled on public blockchains. It is not a stretch to suggest that most banks’ traditional custody frameworks are not built for this asset class – and the time and cost to refit the models will be considerable. The work is do-able; it just requires a clarity of understanding and purpose before acting. Never forget that absolute trust is essential in order to attract and retain digital asset-based banking customers – especially institutional customers. To that end, banks must be able to clearly demonstrate that their digital assets services are reviewed, tested, and audited by regulators and public accounting / auditing firms.
Determine the best path forward
  • Determine the best path forward
    Knowing that the bank wants to get into the digital assets business and actually being able to safely and profitably offer them are two distinct issues. Among the most common refrain by proponents of digital assets is that they “democratize’’ financial assets to a broader range of customers on a peer-to-peer network of exchange. Our question to banks is this: Do their leaders really understand what that statement means? Even if a bank can answer that question in the affirmative, it must have the knowledge required to head down the correct path toward offering this often-mystifying asset class. For many institutions their desire to get onboard may not yet match their capabilities in terms of risk management and clarity about these assets. More than a few organizations have jumped on the “hot, new product’’ only to later realize that their knowledge level was low, and their risk was higher than they anticipated.
Research the regulations
  • Research the regulations
    Bank leaders should ask themselves: Do I have confidence that our institution understands current views and recent actions of our applicable regulators relating to digital assets? Our research shows that successful adoption is largely driven by increased regulatory clarity (though we expect much more regulation to come shortly), a voracious interest among a growing sector of investors to “jump in,’’ and an increasing acceptance among an array of individuals and institutions of stablecoins and central bank digital currencies.2 Therefore, bank executives must be comfortable and knowledgeable about any move into digital assets … and not be reluctant to seek out highly experienced people and organizations to help guide them through the maze of digital asset products and regulation that is only getting more intricate. Banks may also seek to partner with fintechs as a way to broaden their product offerings and gain access to relevant experience and capabilities. But partnering with new organizations requires robust operational and regulatory due diligence on behalf of the bank. Equally as important is the notion that banks have a clear grasp on data security relating to compliance and risk-management issues. Managers and boards must have fundamental comfort on the data risk front when considering digital-asset offerings.

Footnotes:

  1. “Bank of America Begins Research on Digital Assets,’’ Reuters, October 5, 2021
  2. “Banking Blueprint for the Crypto World,’’ KPMG, 2021

Explore more

Pulse of Fintech

Biannual analysis of global fintech funding
Read more
abstract swirl pattern

Meet our team

Image of Robert B. Sledge
Robert B. Sledge
Partner, Audit, Financial Services, KPMG US

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline