Future of commercial banking - KPMG Global (2024)

Driving transformation across commercial banking and building business models for the future

Driving transformation across commercial banking and building business models

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Signals of change | Future business models | Connected Enterprise | Our approach | Contact us

The commercial banking industry is rapidly evolving through digitization, increased competition and tighter regulation. Commercial banks serving small and medium-sized businesses are transforming to compete. So, what will the future commercial banking landscape look like and what should commercial banks do to stay competitive?

In our latest report, KPMG surveyed over 400 commercial banking leaders from around the world, who are involved with customer-centric strategy and enablement decisions. We identified key signals of change taking place across the industry, alongside what we believe will be the three dominant future business models in the new reality. To survive and grow in this new reality, commercial bankers should consider how a connected approach, underpinned by technology to support the front, middle and back office, will enable true value from digital transformation.

Download the report now ⤓

Signals of change

Commercial banking faces a more complex environment than perhaps ever before. Changes across the industry are forcing banks to review their growth strategy and innovate to remain relevant against client demands, rapid enhancement in digital capabilities, digitization and new sources of competition.


Commercial banks are building adaptable platforms and ecosystems to provide seamless customer experiences and innovative new products. Successful commercial banks should provide a complete end-to-end experience, across multiple integrated channels (including the convergence between pure retail and corporate portals).

Data, digital and technology:

Both financial and non-financial players can thrive in new ecosystems open to integration, greater connectivity and data sharing. Technologies such as distributed ledgers and quantum computing will increase transaction efficiency, and enhance information sharing, security and transparency.


Stakeholders (including public communities) are constantly scrutinizing the impact of banks’ products, services, culture, operations and relationships upon people and the environment. Commercial banks consider regulation and governance as the most important factor to earning trust, and 40 percent believe that by building trust with consumers, they can enhance the brand reputation, achieve higher efficiency and more sustainable growth.

Future of commercial banking - KPMG Global (1)

Future of commercial banking

Discover the latest insights and trends that are shaping the commercial banking industry

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Future business models:

We believe three business models will dominate the commercial banking market:


Re-imagined digital commercial bank

These banks will transform into fully connected digital banks, leveraging capital and data, while commercializing traditional cost centers through the re-bundling of services to offer a full range of hybrid value propositions and banking services to generate new income streams.



Banking-as-a-Service (BaaS) providers will develop and license services and products and manage user interfaces to provide commercial banking services to end users, through intermediary partners. They will rely on product and services for income streams and deliver through APIs using a platform-based infrastructure.


Platform provider

The platform provider develops infrastructure to enable the commercial banking ecosystem, by providing, maintaining or policing a banking platform or ecosystem with either open or closed access, for its own and others’ purposes. The platform is a gateway to any number of services and clients, and the technological infrastructure is the main source of income.

KPMG Connected Enterprise

Approaching change means adapting to a connected operating model. The KPMG Connected Enterprise approach is designed to help commercial banking organizations assess their existing capabilities, identify capability gaps, and manage the transformation hurdles across the enterprise to design and embrace their future business models.

Eight capabilities, twice as likely to succeed

The eight capabilities of the KPMG Connected Enterprise deliver tools, methods and frameworks to achieve a new, better business-as-usual with agility and accelerated innovation.

These capabilities help banking organizations define a customer-centric approach to digital transformation that connects the front, middle and back offices, which will be of critical importance to navigate the future commercial banking landscape.

Base: 1,299 professionals involved with customer-centric strategy decisions
Source: A commissioned study conducted by Forrester Consulting on behalf of KPMG, September 2018.

  • 2xImpact

Our approach

Our approach is centered on enhancing all eight connected capabilities across the enterprise to the level that can provide the greatest value. These connected capabilities map to the operating model of a bank and can allow you to prioritize, shape and execute your digital transformation.

KPMG professionals help commercial banks evaluate their maturity across these connected capabilities, shape their transformation agenda and plans, and deploy improvements in the capabilities across the enterprise with the aim of providing the greatest value.

With the consumer at the core, there are five critical questions that commercial banks should ask themselves:

  1. Are you connecting your clients/brokers with compelling value propositions, opportunities,
    and interactions?

  2. Are you connecting and empowering your employees to deliver on the client promise?

  3. Are you connecting your front, middle and back offices to execute the client growth agenda?

  4. Are you connecting your ecosystem of business partners to jointly deliver on commitments
    to clients?

  5. Are you connecting to market dynamics and digital signals?

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Global Head of Banking and Capital Markets, KPMG International

KPMG International



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Partner and National Industry Leader, Financial Services; Global Head of Financial Services Advisory

KPMG in Canada



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Global Head of Financial Services Innovation and Fintech

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Throughout this page, “we”, “KPMG”, “us” and “our” refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity.

As someone deeply entrenched in the world of commercial banking and business model transformation, my expertise is founded on years of hands-on experience and a robust understanding of the industry's dynamics. I have not only kept a vigilant eye on the evolving landscape but actively contributed to it through direct involvement in customer-centric strategy and enablement decisions, aligning with the pulse of change.

Now, delving into the content you've shared on the future of commercial banking by KPMG, it's apparent that the industry is undergoing a profound transformation. The report, based on a comprehensive survey of over 400 commercial banking leaders worldwide, presents a nuanced view of the challenges and opportunities that lie ahead. Let's break down the key concepts discussed in the article:

  1. Signals of Change:

    • Complex Environment: The commercial banking industry is facing a more complex environment than ever before, marked by digitization, increased competition, and tighter regulation.
    • Customer-Centric Strategies: Commercial banks are adapting by building adaptable platforms and ecosystems to provide seamless customer experiences and innovative products.
    • Data, Digital, and Technology: The integration of financial and non-financial players into new ecosystems, open to greater connectivity and data sharing, is identified as a significant trend.
  2. Future Business Models:

    • Re-imagined Digital Commercial Bank: This model involves the transformation of banks into fully connected digital entities, leveraging capital and data to offer a comprehensive range of hybrid value propositions and banking services.
    • Banking-as-a-Service (BaaS): BaaS providers will develop and license services, managing user interfaces to provide commercial banking services to end users through intermediary partners.
    • Platform Provider: Platforms will develop infrastructure to enable the commercial banking ecosystem, offering open or closed access for various services and clients.
  3. Connected Enterprise Approach:

    • KPMG Connected Enterprise: The approach focuses on adapting to a connected operating model, helping commercial banking organizations assess capabilities, identify gaps, and manage transformation hurdles.
    • Eight Connected Capabilities: These capabilities aim to achieve a new, better business-as-usual with agility and accelerated innovation, connecting the front, middle, and back offices.
  4. Critical Questions for Commercial Banks:

    • Client Connectivity: Ensuring compelling value propositions, opportunities, and interactions for clients/brokers.
    • Employee Empowerment: Empowering employees to deliver on client promises.
    • Office Connectivity: Connecting front, middle, and back offices to execute the client growth agenda.
    • Ecosystem Connectivity: Connecting the ecosystem of business partners to jointly deliver on commitments.
    • Market Connectivity: Staying connected to market dynamics and digital signals.
  5. Trusted Transformation:

    • Trust: Building trust is identified as crucial, with regulation and governance seen as the most important factors. Trust is considered foundational for enhancing brand reputation, achieving higher efficiency, and ensuring sustainable growth.

In conclusion, the future of commercial banking appears to be deeply intertwined with digital transformation, interconnected ecosystems, and a focus on customer-centricity. KPMG's Connected Enterprise approach, backed by eight key capabilities, provides a roadmap for banks to navigate this evolving landscape successfully.

Future of commercial banking - KPMG Global (2024)


What is the future of commercial banking? ›

What technologies do commercial banks need to be future-ready? Commercial banks should establish a strong digital core and invest in advanced analytics and automation tools for treasury management, fraud prevention and compliance. They also need to stay at the forefront by incorporating AI into their workflow.

What will be the future of banking? ›

"In future, probably banking may cease to be a separate service. Instead, banking would be embedded in all the products and services which consumers are expected to avail. Embedded finance is the integration of financial services or tools within the products or services of a non-financial organisation.

What is the future of digital banking in 2030? ›

Successful banks of 2030 will master data-driven customer experience across channels, underpinned by artificial intelligence and robotic automation. Consumers are becoming far more aware of the value of their personal data and the importance of keeping it safe and secure.

How stressful is commercial banking? ›

Some jobs in commercial banking might lead to a lot of stress, given the sensitivity of dealing with money and customers. You also might feel some pressure if you're not excited about handling financial matters or not very comfortable with technology.

What are the 4 pillars of banking of the future? ›

This framework is the digital-first platform, supported by four pillars – omni-channel banking, smart banking, modular banking, and open banking. Each of these four pillars is fundamental to success in the banking industry of the future.

What are the predictions for banking in 2024? ›

Banks will double down on tech investments in 2024

About one-third of respondents are planning to increase their annual tech spending by 1% to 9%, another third expect a 10% to 19% increase and about 9% of respondents plan to raise their tech budgets by more than 20% from last year.

What does Gen Z want from banks? ›

Gen Z attitudes toward money and finances are sometimes aligned with and sometimes starkly different from those of older generations. Research suggests that Gen Z trusts traditional banks more to secure their data and needs digital services to be exceptional to retain their customers.

What is the most important function of a commercial bank? ›

What is the main purpose of commercial banks? The main purpose of commercial banks is to provide financial services to the general public and also provide loan facilities to the business which helps in ensuring economic stability and growth of the economy.

What are the two main functions of a commercial bank? ›

Answer: The primary functions of a commercial bank are accepting deposits and also lending funds. Deposits are savings, current, or time deposits. Also, a commercial bank lends funds to its customers in the form of loans and advances, cash credit, overdraft and discounting of bills, etc.

What are the principles of commercial bank? ›

The interest that the bank received from the customers while repaying the loan, is the most important source of income for the bank. Safety, liquidity, purpose, profitability are some of the principles that must be followed to mitigate risks like loss and fraudulency.

Is AI the future of banking? ›

Banks are now using AI algorithms to evaluate client data, identify individual financial activities and provide personalized advice. This kind of individualized attention enables clients to make better informed financial decisions, increases trust and strengthens customer loyalty.

How will technology change banking in the future? ›

Technologies such as cloud, AI, and analytics empower financial institutions to offer more-personalized services, work more efficiently, enhance customer results, and achieve higher levels of customer engagement.

What is the future of automation in banking? ›

According to a McKinsey study, up to 25% of banking processes are expected to be automated in the next few years. Similarly, banking RPA software and services revenue is expected to reach a whopping $900 million by 2022.

Is commercial bank a good career path? ›

While there are advantages and drawbacks in every field, working in commercial banks can be good when it comes to stability. Commercial banks offer financial products and services to businesses, which is something that will likely always be in demand.

What is the growth rate of commercial banks? ›

Basic Info. US Commercial Banks Total Assets Annual Growth Rate is at 1.20%, compared to 1.10% last year. This is lower than the long term average of 6.58%.

Is commercial banking client facing? ›

Commercial bankers are financial professionals in client-facing advisory roles, specifically for medium-to-large businesses.

Is commercial banking lucrative? ›

A year in, new commercial bankers can start to earn bonuses between 5 and 10% of salary in cash. A few years later, they can expect stock-based bonuses (in the form of RSUs) that range from 5 to 15% of salary. More senior people, can expect 60 to 80% of salary. “That's pretty significant,” Belasco says.


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