Banking in the new reality

By Peter Torrente

The banking industry continues to be impacted by COVID-19, and as uncertainty clouds the future, there are strong signs that banks are not taking a “wait and see” approach, but rather taking actions to ensure they are prepared for the new reality when we make our way through the pandemic.

Banks across the globe have continued to play a fundamentally important role supporting businesses and families by administering government-backed loans, providing additional liquidity and rapidly installing forbearance measures. In many ways, trust in banks is at an all-time high, and they are being viewed by customers and businesses in a positive light. The key now is to retain those gains and build on them.

To thrive in the new reality, banks will need to meet the increasing demands from their customers to offer a streamlined digital experience by modernizing their operations across their front, middle and back offices.

KPMG’s latest report: Banking in the New Reality identifies six key themes that have accelerated during the pandemic, which we believe are critical to banks’ future success.

Access the report

Six key trends in the new reality:

  • New distribution channels reconfiguring the landscape
  • Harnessing the shift to a digital economy
  • Cost priorities reimagined, new operating models emerging
  • New ways of working becoming the norm
  • Writing a whole new risk management playbook
  • Values and purpose front and center

Over the course of the next few weeks, we will drill down into each of the six key themes to provide KPMG’s banking subject matter experts’ perspectives on the future of banking and their predictions for the future. 

Let me delve into the first trend that we have identified and provide some thoughts on New distribution channels reconfiguring the landscape.

One of the key changes we expect to see regarding distribution channels is not surprising –the elimination of some bank branches and the repurposing of others. As we move toward a more cashless society, with digital capabilities accelerating, banks need to evaluate their branch networks and ask themselves “what purpose are the branches actually serving.”

According to some analysts, banks that prior to the outbreak of COVID-19 infections expected to close 5 percent of branches could increase that figure to up to 10 percent. However, the number of branches in some specific geographic regions actually may increase due to population and demographic reasons – although the footprint of branches may shrink.

Clearly defining the role of branches and contact centers is one of the critical challenges facing banks in the new reality.

Along with assessing their branch networks, banks need to consider – and many already are -- implementing their plans to accelerate their digital infrastructure across the enterprise, extending and improving digital delivery through customer facing digital channels, core banking platforms, IT systems and the cloud.

In the wake of COVID-19, the change that would have happened over the next five years may now take place over the next 24-36 months. 

Banks need to accelerate their digital implementation plans to stay ahead in meeting the needs of business and retail customers, who have grown more accustomed to the digital experience since the pandemic began.

Banks also need to bolster their data and analytics capabilities to leverage their data to improve the customer experience.  Machine learning and AI capabilities will also be needed to drive effective personalization and customer engagement.

Five predictions:

  • Branch networks will be slimmed down and undergo significant change
  • Digital channel functionality will develop rapidly and at scale
  • Call centers will be re-evaluated and re-purposed
  • Banks will introduce new integrated e-commerce suites to bring more small businesses on line
  • Cash may stage a partial recovery but is on a terminal decline

Next:  We will focus on Harnessing the shift to a digital economy

For more information, please contact Pete Settles @pgsettles or

Media contact

Pete Settles

Pete Settles

Director, Corp. Comm., Financial Services, KPMG US

+1 201-505-6065



Peter Torrente

Peter Torrente

National Sector Leader, Banking & Capital Markets, KPMG US

+1 212-872-5815

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