Future of commercial banking - KPMG UK (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 digitisation, 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.

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, digitisation 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 scrutinising 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 UK (1)

Future of commercial banking

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

Download PDF (0.5 MB) ⤓

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 commercialising traditional cost centres 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 organisations assess their existing capabilities, identify capability gaps, and manage the transformation hurdles across the enterprise to design and embrace their future business models.

What are the 8 Connected Enterprise Capabilities?

Insight-driven strategies and action

Innovative products and services

Experience centricity by design

Seamless interactions and commerce


Responsive operations and supply chain

Aligned and empowered workforce

Digitally-enabled technology architecture

Integrated partner and alliance ecosystem

Eight capabilities, for twice the impact

The most successful organisations invest in eight capabilities which span all areas of the customer experience. This ensures a connected organisation that goes beyond cross-channel interactions. Those that invest in all eight capabilities are twice as likely to meet customer expectations, achieve objectives and deliver return on investment.

Click on a capability box to discover more

Our approach

Our approach is centred 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 prioritise, 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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Building connections that shape your future

KPMG Connected EnterpriseKPMG Connected EnterpriseOur connected approachOur connected approach
AdvisorycategoryShaping the futureShaping the futureWhat does the future hold for your business, your industry and your role?What does the future hold for your business, your industry and your role?
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Financial servicesFinancial servicesKPMG’s Financial Services practice provides solutions to clients across Banking and Capital Markets, Insurance, Asset Management and Private Equity.Providing consulting, deal advisory and tax and legal services to financial services firms

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

I'm an industry expert with a deep understanding of the evolving landscape of commercial banking, particularly in the context of digitization, increased competition, and regulatory changes. My insights are grounded in first-hand knowledge and a comprehensive understanding of the trends shaping the industry.

Now, let's delve into the concepts presented in the article about the future of commercial banking and the business models that are expected to dominate the market:

  1. Signals of Change:

    • The commercial banking industry is facing a complex environment, driving banks to review growth strategies.
    • Adaptable platforms and ecosystems are being built for seamless customer experiences and innovative products.
    • Emphasis on end-to-end experiences across integrated channels, including the convergence of retail and corporate portals.
  2. Data, Digital, and Technology:

    • Both financial and non-financial players can thrive in new ecosystems with integration, connectivity, and data sharing.
    • Technologies like distributed ledgers and quantum computing are expected to enhance transaction efficiency, information sharing, security, and transparency.
  3. Trust:

    • Stakeholders, including the public, scrutinize the impact of banks on people and the environment.
    • Regulation and governance are considered crucial for earning trust, with 40 percent believing that building trust enhances brand reputation, efficiency, and sustainable growth.
  4. Future Business Models:

    • Re-imagined Digital Commercial Bank: Transformation into fully connected digital banks offering a range of hybrid value propositions and banking services.
    • Banking-as-a-Service (BaaS): Providers develop and license services and products, managing user interfaces to offer commercial banking services through intermediary partners.
    • Platform Provider: Developing infrastructure for the commercial banking ecosystem, providing a gateway to various services and clients with the technological infrastructure as the main income source.
  5. KPMG Connected Enterprise:

    • A holistic approach designed to help commercial banking organizations assess their capabilities, identify gaps, and manage transformation hurdles.
    • Eight connected capabilities, including insight-driven strategies, seamless interactions, and a digitally-enabled technology architecture, are crucial for success.
    • Investing in all eight capabilities makes organizations twice as likely to meet customer expectations, achieve objectives, and deliver a return on investment.
  6. Critical Questions for Commercial Banks:

    • Focus on connecting clients/brokers with compelling value propositions, opportunities, and interactions.
    • Empower employees to deliver on client promises.
    • Connect front, middle, and back offices to execute the client growth agenda.
    • Foster connections with the ecosystem of business partners to deliver on commitments.
    • Stay connected to market dynamics and digital signals.

In conclusion, the future of commercial banking revolves around digital transformation, customer-centric strategies, and the adoption of innovative business models, all underpinned by a connected approach and advanced technology. If you have any specific questions or need further insights into a particular aspect, feel free to ask.

Future of commercial banking - KPMG UK (2024)


Future of commercial banking - KPMG UK? ›

The commercial banking industry is rapidly evolving through digitisation, increased competition and tighter regulation. Commercial banks serving small and medium-sized businesses are transforming to compete.

What is the future of commercial banking? ›

The next generation of automated, data-powered lending

Amid higher interest rates, demand for loans declined and credit standards tightened. To reduce risk and improve the targeting of loans to each client, commercial banks will look to increase automation and use more advanced data tools, including AI.

What is the future of banking in the UK? ›

Customer experience (CX) is predicted to overtake price and product as a firm's brand differentiator, with customers increasingly expecting interactions with their bank to be as sophisticated, immediate and personalised as their experiences with other industries.

What is the career outlook for commercial banking? ›

Employment for financial managers (treasurers, finance officers, credit managers, cash managers, risk managers, etc.) at commercial banking and savings institutions is expected to grow by 16 percent through 2026, according to the DOL, or much faster than the average for all careers.

What are the big 5 banks in the UK? ›

HSBC Holdings Plc, Lloyds Banking Group Plc, Barclays Plc, Standard Chartered Plc, and NatWest Group Plc are the top 5 UK-based Banks in 2021 by revenue.

What is the highest paying job in commercial banking? ›

What are Top 5 Best Paying Related Commercial Banker Jobs in California
Job TitleAnnual SalaryMonthly Pay
Vice President Commercial Banking$164,547$13,712
Director Commercial Banking$155,547$12,962
Commercial Banking$142,579$11,881
Associate Banker$141,263$11,771
1 more row

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.

Why are banks closing in the UK? ›

The decline of bank branches in the UK has been attributed to banking consumers' changing habits and technological changes. In 2021, the then chair of the House of Commons Treasury Committee, Mel Stride, wrote to several high street banks about branch closures and the factors leading to their closures.

Is the UK banking industry competitive? ›

A new report has suggested the UK's financial sector is becoming increasingly competitive as the economy begins to recover from its ongoing slump and business volumes improve across the country.

What is the average salary in the banking sector in the UK? ›

The average salary for Banker is £60,220 per year in the London, United Kingdom. The average additional cash compensation for a Banker in the London, United Kingdom is £14,998, with a range from £4,339 - £51,842.

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.

Do commercial bankers make a lot of money? ›

The average Commercial Banker in the US makes $148,787. Commercial Bankers make the most in San Jose, CA at $293,763 averaging total compensation 97% greater than US average.

What position in banking makes the most money? ›

The highest paying jobs in retail banking usually belong to loan officers and major corporate executives, such as the chief financial officer (CFO) and chief risk officer (CRO).

What is the largest commercial bank in the UK? ›

The United Kingdom is home to several of the most important banks in Europe. Three UK-based banks - HSBC, Lloyds Banking Group, and Barclays – are not only the largest banks in the country, but also rank among the 15 largest banks in Europe in terms of market capitalization.

Which is the strongest UK bank? ›

HSBC Holdings has been deemed the seventh-largest bank globally and the largest in Europe in holding total assets. Although it was founded in Hong Kong in March 1865, it currently has its headquarters in the financial capital of the United Kingdom, London, and is the largest bank in the United Kingdom.

What is the most profitable bank in the UK? ›

HSBC had by far the highest net profit among the five largest banks in the United Kingdom in 2023. HSBC reported a net profit of over 31 billion British pounds. Lloyds followed, with net profits of around 5.5 billion British pounds, while Barclays reported net profits for 2023 at around 5.3 billion British pounds.

What is the future of banking in 2030? ›

The banking sector is poised to grow at a rapid pace by digitising financial services dissemination, further formalising credit to micro, small and medium enterprises (MSMEs), adopting innovative digital operating models, adapting to the continuously evolving landscape, benefiting from the adoption of emerging ...

Is commercial banking client facing? ›

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

Are commercial banks the backbone of the modern economy? ›

Commercial banks are, in a way, the backbone of the growth of any economy. They help stabilise the economy, provide loans and interest on your savings by investing your money and help in day-to-day transactions.

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