KPMG Survey: Banking execs focused on weathering risks to growth while investing in digital future

—   Credit risk poses greatest threat to growth, with culture, regulatory action, tax and cybersecurity also top of mind.

—   Nearly 50% say the future of banking will be exclusively digital and virtual within a decade; 39% to have metaverse presence within a year.

—   77% expect recession within a year; 42% see managing the risks and costs of inflation as a key challenge.


NEW YORK, June 28, 2022 — Executives from the largest banking institutions are focused on addressing a multitude of risks and challenges, such as credit risk (credit card and loan defaults/delinquencies) and inflation, while investing in digital strategies and offerings that will include the metaverse, according to a new survey from KPMG LLP, the U.S. audit, tax and advisory firm.

“Banking executives are proactively tackling various risks and threats to their banks’ growth — including credit and cyber risk — while investing in the future,” said Peter Torrente (@PeterTorrente), National Sector Leader, Banking and Capital Markets, KPMG LLP. “Banks with a customer-first mindset and digital-now strategy will be best positioned to succeed amid the ongoing economic uncertainty.”

The KPMG State of Banking Survey features insights from 100 senior executives – many representing some of the largest banks in the industry with nearly 40% having assets totaling $100 billion or more – on key challenges and opportunities facing the banking industry. The key findings of the survey are below.

Economic and industry outlook

  • 77% expect a recession within the next 12 months.
  • 87% are confident in the long-term growth prospects of the U.S. economy, but only 27% are confident in short-term growth.
  • Respondents show confidence in the growth prospects of the global economy in both the long term (97%) and short term (64%).
  • 55% are unsure of their banks’ future profitability and growth prospects in this highly uncertain environment of inflation and geopolitical risks.
  • 59% expect the Federal Reserve to raise interest rates every time it meets in 2022; 54% predict rates will continue to rise into the first quarter of 2023.

Threats to growth

  • Credit risk is seen as the number one threat to growth over the next three years, followed by culture, regulatory action, tax and cybersecurity.
  • 42% see managing the risks and costs of inflation as a key challenge.

Cyber risks

  • As digital banking increases, 81% of respondents expect to see an increase in cybersecurity threats, yet 34% indicate their bank is not investing enough in cybersecurity protection.
  • 43% say their bank is not adequately equipped to protect customer data, privacy and assets in the event of a cyberattack. 
  • 64% have not seen an increase in cyberattacks on their bank since the start of the Russia-Ukraine war.
  • Nearly half (47%) are investing more heavily in cybersecurity as a result of the Russia-Ukraine war.

Digital investment vs. brick-and-mortar

  • Nearly half (48%) say that within the next decade banking will be exclusively digital and virtual with no brick-and-mortar facilities.
  • Two-thirds are currently downsizing their brick-and-mortar footprint.
  • To better compete in the digital age, 60% are investing heavily in developing their own digital and fintech capabilities, with 54% admitting they are losing significant market share to nontraditional service providers.


  • 39% plan to have a presence in the metaverse within a year, with 53% noting that failing to establish a presence will result in significant future market share loss.
  • The most important reason for establishing a presence in the metaverse is providing an efficient and compelling customer service channel (34%), followed by improving customer engagement (22%).

Mergers and acquisitions (M&A)

  • Over the next three years, 63% say they will have a moderate or high M&A appetite.
  • 31% say pursuing M&A is among their organization’s top five priorities.

Environmental, social, governance (ESG)

  • 45% say they lack the technology solutions necessary to achieve their climate ambitions, such as net-zero emissions.
  • 67% say their bank plans to purchase assets in carbon markets to meet ESG goals.
  • 50% identify setting an achievable ESG goal and reporting compliance as top priorities.


  • 61% identify employee retention and the Great Resignation as talent issues of significant concern to their organization, while 50% cite adaptation to a remote or hybrid environment and competition for technology-capable talent.
  • 51% are acquiring talent by accessing both a wider geographic base and greater diversity of talent.
  • When asked about their key areas of focus associated with future of work risk and opportunities, 49% are focusing heavily on maintaining firm culture in a predominantly remote or hybrid environment, and 57% on balancing the need for in-person and digital interactions.


KPMG LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing audit, tax and advisory services. The KPMG global organization operates in 144 countries and territories and has more than 236,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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Media Contact

Allison Rivellini

Allison Rivellini

Senior Associate, Corporate Communications, KPMG US

+1 212-758-9700





Peter Torrente

Peter Torrente

National Sector Leader, Banking & Capital Markets, KPMG US

+1 212-872-5815

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