Banking & capital markets

CEO interview quotes

"The days of being able to just think of other banks as your competitor are over. We’ve seen new entrants that are being driven by technology."
"The change that our people will go through over the next five years will, I suspect, be even greater than the huge change our business has seen over the last five years."
"While I do not categorically reject this approach, I’m afraid that if a company continues to recruit college graduates for a lifetime employment, it could eventually end up in a monotone culture."
"An example is our partnership with a major Russian telecom player, VimpelCom... Historically, many believe that mobile operators and banks are competitors. However, we believe that, within this joint venture, we can share our experience."

In conversations our BCM clients tell us they have three major priorities – finding growth in a challenging environment, driving productivity, and getting ahead of risk and regulatory management. This year’s survey findings are consistent with these priorities, and with our views on the changing banking landscape and the imperatives for banks to respond to such change, which we explore in more detail in our 2020 series.

Growth and disruption

92% of BCM CEOs are confident about their growth prospects over the next three years, in line with the global CEO population.  Yet they are not untrammelled optimists – only 43% believe that global economic growth will improve over the next 12 months, down from 56% last year.
And they are very aware of the powerful forces that are reshaping the industry at an ever increasing pace – with 58% of BCM CEOs believing there are more threats to their company’s growth prospects than three years ago, while the same proportion believe there are more opportunities.

Non-traditional players

New market entrants are disrupting existing models, largely by better-serving customer needs at distinct points of the value chain. Examples include: crowdfunding – offering new lending and deposit opportunities; payments innovation – making transactions more convenient; market utilities – lowering the cost of transaction activities.  New entrants are able to use technology to provide a better customer experience, at lower cost, unencumbered by legacy infrastructure or business models.

Our survey results suggest that while some of these new entrants are coming from other areas of financial services such as asset management, Banking & Capital Markets CEOs are also facing threats from technology and communications companies. More than three-fifths of BCM CEOs think that organisations are likely to increasingly compete in sectors other than their own over the next three years.

So it’s not surprising that 53% of BCM CEOs see new market entrants as a threat to growth, up significantly from 32% last year.

Regulation continues to challenge business models and economics

The proportion of BCM CEOs who see over-regulation as a threat to growth has grown from its previous high level of 80% last year to 89% this year. In fact, a full 62% say they are extremely concerned, mirroring its return to number one in our Banking Banana Skins 2014 Survey.  In addition, 53% of BCM CEOs believe regulatory change will have a disruptive impact over the next five years

Diversity

As reported in PwC’s Retail Banking 2020, developing a customer-centric business model is one of the six imperatives for banks’ success in 2020. A  more customer-centric business requires people who better reflect the changing customer base. Two-thirds of banking and capital markets CEOs either have a strategy to promote talent diversity and inclusiveness or have plans to adopt one. Those that do are reporting a number of benefits, including helping them to attract talent (89%), enhance business performance (85%), and strengthen their brand and reputation (85%). This strategy might include bringing in people from client industries to ensure a better understanding of their needs and how to deliver the right outcomes. It would also include ensuring the profile of senior management reflects the geographies and demographics of markets targeted for growth.

Banking and capital markets CEOs also say they use multiple channels to find talent, including online platforms and social networks (81%) and look for a much broader range of skills when hiring than they did in the past (78%)

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CEO interview quotes

"The days of being able to just think of other banks as your competitor are over. We’ve seen new entrants that are being driven by technology."
"The change that our people will go through over the next five years will, I suspect, be even greater than the huge change our business has seen over the last five years."
"While I do not categorically reject this approach, I’m afraid that if a company continues to recruit college graduates for a lifetime employment, it could eventually end up in a monotone culture."

In conversations our BCM clients tell us they have three major priorities – finding growth in a challenging environment, driving productivity, and getting ahead of risk and regulatory management. This year’s survey findings are consistent with these priorities, and with our views on the changing banking landscape and the imperatives for banks to respond to such change, which we explore in more detail in our 2020 series.

Growth and disruption

92% of BCM CEOs are confident about their growth prospects over the next three years, in line with the global CEO population.  Yet they are not untrammelled optimists – only 43% believe that global economic growth will improve over the next 12 months, down from 56% last year.
And they are very aware of the powerful forces that are reshaping the industry at an ever increasing pace – with 58% of BCM CEOs believing there are more threats to their company’s growth prospects than three years ago, while the same proportion believe there are more opportunities.

Non-traditional players

New market entrants are disrupting existing models, largely by better-serving customer needs at distinct points of the value chain. Examples include: crowdfunding – offering new lending and deposit opportunities; payments innovation – making transactions more convenient; market utilities – lowering the cost of transaction activities.  New entrants are able to use technology to provide a better customer experience, at lower cost, unencumbered by legacy infrastructure or business models.

Our survey results suggest that while some of these new entrants are coming from other areas of financial services such as asset management, Banking & Capital Markets CEOs are also facing threats from technology and communications companies. More than three-fifths of BCM CEOs think that organisations are likely to increasingly compete in sectors other than their own over the next three years.

So it’s not surprising that 53% of BCM CEOs see new market entrants as a threat to growth, up significantly from 32% last year.

Regulation continues to challenge business models and economics

The proportion of BCM CEOs who see over-regulation as a threat to growth has grown from its previous high level of 80% last year to 89% this year. In fact, a full 62% say they are extremely concerned, mirroring its return to number one in our Banking Banana Skins 2014 Survey.  In addition, 53% of BCM CEOs believe regulatory change will have a disruptive impact over the next five years

Diversity

As reported in PwC’s Retail Banking 2020, developing a customer-centric business model is one of the six imperatives for banks’ success in 2020. A  more customer-centric business requires people who better reflect the changing customer base. Two-thirds of banking and capital markets CEOs either have a strategy to promote talent diversity and inclusiveness or have plans to adopt one. Those that do are reporting a number of benefits, including helping them to attract talent (89%), enhance business performance (85%), and strengthen their brand and reputation (85%). This strategy might include bringing in people from client industries to ensure a better understanding of their needs and how to deliver the right outcomes. It would also include ensuring the profile of senior management reflects the geographies and demographics of markets targeted for growth.

Banking and capital markets CEOs also say they use multiple channels to find talent, including online platforms and social networks (81%) and look for a much broader range of skills when hiring than they did in the past (78%)

Explore the data

Interested in more? Use the data explorer to browse through additional industry data

Launch the data explorer