Banking Agenda: Issue 1, 2017

Global Banking Outlook

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Uncertainty is no excuse for inaction.

Even in a time of uncertainty, banks must take decisive steps to improve their financial performance, while also focusing on their control and protection agenda.


While only 11% of banking executives globally expect their financial performance to improve significantly over the next 12 months, the majority of banks will be investing in new customer-facing technologies to help spur growth according to the EY Global Banking Outlook 2017.

Managing reputational risk (69%) and meeting regulatory compliance and reporting standards (66%) are the top two strategic priorities for banks globally in 2017, reflecting a continued need to strike the right balance between risk management and building tomorrow’s growth engine. Closer to home, enhancing cybersecurity and complying with consumer regulation and remediation issues are taking precedence, with the full 100% of Australian banking executives surveyed identifying these two areas as their top priorities for the year ahead.

According to the survey findings, globally, banks should focus on improving five specific areas inside their organisations:

  • 1. Reshape
    The banking industry will coalesce around four primary business models: local boutiques, global boutiques, regional champions and universal super banks. Banks must pick one and then restructure operations accordingly.
  • 2. Control
    Banks need to strengthen their three lines of defense risk management approach by improving efficiency, strengthening focus on vendor management and creating simpler supply chains.
  • 3. Protect
    Banks need to minimise internal and external threats by putting legacy issues in the past and demonstrating they have systems in place to prevent money laundering and financial crime. They will also need to prepare for cyber attacks and future outages.
  • 4. Optimise
    Banks need to minimise internal and external threats by putting legacy issues in the past and demonstrating they have systems in place to prevent money laundering and financial crime. They will also need to prepare for cyber attacks and future outages.
  • 5. Grow
    Banks need to invest in staff and technology to support innovation in order to defend market share and ensure they remain competitive as customers become more willing to use financial products offered by non-traditional partners.

Banks need to do less – streamlining operating models and partnering with fintech, blockchain firms and other industry disruptors to deliver better services. They need to be relentless in driving out costs and managing risks. The key to success will be building a better ecosystem, not a bigger bank


For more information, contact a member of the EY Oceania Financial Services team:

  • Tim Dring - EY Oceania Banking and Capital Markets Leader

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