Apath to improving financial performance, harnessing technology, and seizing growth opportunities requires a different operating model. This model should focus on three intertwined issues: balance sheet management, technology, and regulatory response.
Here, leaders need to be more deliberate in allocating capital and liquidity while prioritising investments to address technology and regulatory issues. A simpler operational configuration allows for agility and reduced expenses, making it a necessity in the current banking environment. However, careful planning and execution are necessary to ensure the transition is smooth and minimises potential drawbacks.
In 2024, pivotal trends in international banking are believed to fall into the following categories:
Reacting to regulators' requests can be costly and resource-consuming. Executives can streamline governance and controls systems and manual processes to lower costs and free up valuable talent. Implementing upgraded compliance infrastructure can instil regulatory confidence and reduce the risk of non-compliance.
The search for different profitability levers should entail a data-driven approach to analysing risk-adjusted financial performance. This may involve new partnerships or nonbank relationships that can help optimise returns and maximise the narrative's value.
Modern cores, digitised operations, and cloud-based computing remain promising sources of renewal and reinvention for the banking business model. Deciding when, how, and what systems to upgrade is a strategic decision that requires the input of the entire C-suite.
Banks must seamlessly integrate GenAI model governance (a subfield of AI focused on creating new things, not just analysing existing ones) into their existing AI governance frameworks. Robust data ring-fencing practices are crucial to safeguard sensitive information. Additionally, ensuring compliance and comprehensive reporting will be paramount. The good news? The efficiency gains GenAI unlocks throughout the organisation can help offset the adoption costs.
With the focus on renewable energy and reduced fossil fuel use, banks will integrate climate and sustainability into how they evaluate risk and opportunity in every financial product and service.
This list is not exhaustive and does not represent all major global banking giants. Each company mentioned has its own unique strengths, weaknesses, opportunities, and threats (SWOT) that should be analysed before making any investment decisions. The banking industry is subject to complex regulations and economic factors that can impact profitability and stock prices.
JPMorgan Chase & Co. is a global leader in international banking, offering a wide range of financial services to consumers and businesses.
HSBC Holdings is one of the largest banking and financial service organisations in the world, serving millions of customers through its global businesses.
Banco Santander is a leading retail and commercial bank, with a strong presence in Europe and the Americas.
UBS Group AG is a Swiss multinational investment bank and financial services company. It is one of the world's largest and most known banks.
BBVA is a customer-centric global financial services group that is evolving to meet the changing needs of its clients.
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