IT driving change for Banking & Capital Markets in the new reality

Prior to COVID-19, companies and firms in the Banking & Capital Markets (B&CM) sector had been among the leaders in technology-led transformation.  The onslaught of the virus has forced banks to accelerate even faster to scale their digital channels to all their customers, delivering across a digital platform of integrated data, processes and technology. 

The barriers to digital transformation – including siloed structures and systems, the inability to scale enterprise cloud, an unclear vision from the top and a lack of modern skill sets – have posed a challenge for organizations that had previously not invested at scale.

According to the 2020 Harvey Nash CIO Survey, which polled 351 technology leaders across the global B&CM sector, digital leaders have gained a clear advantage over non-digital leaders.

The digital leaders have fared significantly better than non-digital leaders on key metrics such as operational efficiency (59 percent vs. 36 percent), time to market for new product and service offerings (42 percent vs. 19 percent) and customer experience (49 percent vs. 29 percent). They also do better on customer trust than non-digital leaders (53 percent vs. 45 percent) and providing a better employee experience (42 percent vs. 33 percent).

“It is striking how far ahead some digital leaders are compared to slow to adopt digital banks and capital markets firms.  Digital leaders exceed their competitors across almost every key metric,” said Mark Twerdok, Advisory leader for KPMG’s U.S. Banking practice.

 “In such a highly competitive space, banks and capital markets’ strategic IT priorities of operational efficiency, digitally enabled customers and agility and speed to market will lead them to a better path to the new reality,” he added.

According to the survey, 47 percent of B&CM companies expect to re-emerge stronger in the new reality by transforming their operating models to be more in line with changing consumer priorities.

Top three banking priorities:

  1. Operational efficiency
  2. Customer engagement
  3. Agility and speed to market

 Top three banking investment priorities

  1. Infrastructure/Cloud
  2. Security and privacy
  3. Customer experience and engagement

Demand for banking services is strong

While the demand for banking services has remained high, operational challenges lie ahead. Most organizations see COVID-19 impacting their bottom line in the near to medium term due to low interest rates and higher anticipated credit losses as business failures and unemployment levels rise.  They believe different lines of business within the sector will recover at different rates (e.g., retail vs investment banking) which will make accelerating digital transformation an absolute necessity to increase operational efficiencies, create scalability and leverage data as an asset.

Companies in the B&CM sector are looking to increase automation and plan to invest in infrastructure/cloud as a key enabler to set up their digital backbone long-term and build resilience to events such as COVID-19. They are investing in security and privacy and customer engagement to maintain customer trust, loyalty and confidence.

“Connectivity between the front, middle and back office is vital for banking and capital markets businesses to meet customer expectations at market speed,” said Pierre Champigneulle, Financial Services Advisory principal, KPMG US.

“In the new IT reality, new ways of working are critical to rapidly respond to market signals and customer demands,” Champigneulle added.

Culture and Inclusivity

More than half of those polled said they believe COVID-19 has created a culture of inclusivity in the technology team, with 70 percent saying it has improved collaboration between their team and the business.  

The survey also found that the top factor in engaging and retaining key technology talent in the new reality is a strong culture and leadership, followed by good remuneration, career progression opportunities and purpose of organization.

Forty-seven percent of the IT leaders said they plan to keep more than half of their workforce working remotely.

Additional Resources

Harvey Nash/KPMG CIO Survey 2020 Infographic
Now in its 22nd year, the Harvey Nash/KPMG CIO Survey 2020 is the largest IT leadership survey in the world, with over 4,200 responses from CIOs and technology executives across 83 countries.

Media contact

Pete Settles

Pete Settles

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

+1 201-505-6065



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