The banking sector has always understood the value of cost control—but today, the game has changed. Traditional cost-cutting alone won’t cut it in an environment shaped by digital disruption, rising customer expectations, and economic uncertainty. To stay competitive, banks are doubling down on technology and workforce transformation as strategic levers for long-term efficiency.
KPMG releases Banking transformation: The new agenda
Banking leaders are not merely automating—they are re-evaluating the entire approach to work with AI at the heart of their strategies. According to Banking transformation: The new agenda, banking leaders see significant potential in new technologies to drive their transformation goals. More than half (52%) are already employing AI and automation in fraud detection and document processing, while 50% are utilising automation in customer interactions, including chatbots. The adoption of AI technologies is aiding organisations in streamlining their operations to achieve cost transformation targets. The key takeaway? Don’t wait for AI to prove its value—invest with purpose, scale with speed, and focus on achieving tangible outcomes.
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The need to reimagine workforce strategies to enhance productivity
Investing in new technologies is only part of the solution. The true value lies in the people, which is why leaders are reimagining their workforce strategies to enhance productivity. For example, banking executives are implementing cross-functional working groups dedicated to transformation, investing in digital apprenticeship programs, and introducing digital assistants to relieve employees from manual administrative tasks, allowing them to focus on more high-value activities.
Additionally, 82% of banking leaders plan to form collaborative partnerships with startups to infuse fresh ideas into their organisations. This evolution in workforce strategy is essential for driving profitability, because without it, leaders will find themselves scratching the surface and unable to fully realise their transformation and cost reduction ambitions.
The journey to cost transformation is no small feat, with challenges rearing at every turn. One major hurdle banking leaders are facing is alignment. Our findings revealed that less than half of banks globally feel prepared to deliver on their cost and transformation objectives. But why is that? The lack of preparedness stems from a lack of enterprise-wide clarity about cost reduction and transformation strategies. Addressing this issue is critical, as failing to do so will put banks at risk of being siloed and unprepared for sustainable growth. Fortunately, there are a few ways to achieve greater alignment, one of which is creating a centralised approach to transformation. This involves establishing a global, centralised team that coordinates and drives strategy and execution across the organisation.
Among the respondents who use a centralised approach, half indicated they consider it to be an effective method for achieving transformative outcomes.
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By GlobalDataCost transformation: Incremental change is not enough
What’s clear is that cost transformation today requires more than incremental change; it demands a bold, holistic approach. In a landscape defined by disruption and opportunity, success will belong to those bold enough to invest in innovation, empower their people, and align cost strategies with long-term value creation. By doing so, banking leaders can turn today’s challenges into tomorrow’s competitive edge.
Owen Lewis is Global Lead for Banking Cost Transformation, KPMG International & Partner, KPMG in Ireland
