In an atmosphere of persisting global economic and geo-political uncertainty, we checked in with 142 Banking CEOs from across the globe, to better understand their priorities, and the challenges and opportunities their businesses are presently facing. While this cohort of banking leaders acknowledged that significant headwinds continue to influence the global economy, with a corresponding impact on the financial wellbeing of their clients, they expressed confidence in the growth of their industry and organizations over the next three years. While these CEOs remain vigilant to the disruptive forces and risks on the horizon, they showed confidence in their ability to weather current conditions and move forward with important investments in talent, technology, ESG and inorganic growth that will provide a clear return on investment.
In addition, their perspectives on issues such as climate transition, M&A, generative AI, cyber-security and hybrid work models reveal that, while much progress has been made to strengthen and transform their organizations, they believe that considerable effort remains to achieve readiness for a greatly changing world.
The main sentiment among bank CEOs is cautious optimism. They feel quite able to navigate current uncertainty, thanks to the steps taken in recent years to strengthen governance and risk management. With solid management capability, capital and liquidity in place, everyone is looking toward growth possibilities.
Global Head of Banking and Capital Markets
Reflecting on the overarching viewpoints and priorities of banking CEOs in 2023, several clear themes have emerged.
Focusing on strategic growth:
Banking leaders maintain a positive outlook for the next three years with an underlying confidence in their growth momentum for their organization and an emphasis on digitalization and talent retention. With a strong appetite for M&A, if the right conditions arise, most are prioritizing expansion of their workforce skills and capabilities. And, in an admittedly more complex operating environment, CEOs are favoring a more collaborative and shared approach to leadership.
Delivering on their trusted purpose:
With most stakeholders now expecting companies to have an ESG strategy embedded into their business models, bank CEOs appreciate the importance of investing to achieve their stated ESG and net-zero commitments, particularly in the areas of climate change and Diversity & Inclusion. Many are investing now to deeply hard-wire ESG across their business, to go beyond compliance demands and reap a longer-term return on investment.
Evolving view of the future of work:
As banking leaders recognize the need to welcome more diverse talent, develop and retain specialized skills, and model values-based work cultures, their acceptance of hybrid work models is evolving, although they do want to encourage greater in-office work to help foster team cultures, communication and collaboration.
Bullish on gen AI, but mindful of challenges:
Survey participants expressed a strong enthusiasm for the benefits of generative AI and are prioritizing investment in these technologies. While they are highly attuned to the challenges that arise in tandem with technology adoption, including the increased risk and frequency of harmful cyber-attacks, they expect a clear return on these investments and recognize the need to fortify their institutional safeguards.
While it is natural in this environment for bankers to prudently manage risk, at the same time it is important to recognize that we are living in an unprecedented transition period, in terms of geo-politics, macroeconomic, technology and demographic factors, alongside energy transition and climate change. You must be brave enough to invest significantly in the things needed to help both your bank and your clients adapt, including digital technology, AI and ESG, because the world is going to be very different and you must be prepared for it.
Global Head of Banking and Capital Markets
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About the KPMG 2023 CEO Outlook
The 9th edition of the KPMG CEO Outlook, conducted with 1,325 CEOs between 15 August and 15 September 2023, provides unique insight into the mindset, strategies and planning tactics of CEOs.
All respondents have annual revenues over US$500M and one-third of the companies surveyed have more than US$10B in annual revenue. The survey included leaders from 11 markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, UK and US) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications).
NOTE: Some figures may not add up to 100 percent due to rounding.