Executive summary

Ten years after the global financial crisis, the banking industry has regained its health and the mood of bankers is more buoyant. They should enjoy it while it lasts.
With 85% of banks citing implementation of a digital transformation program as a business priority for 2018,
investment in technology to drive efficiency, manage evolving risks and benefit from growth opportunities will be critical for sustainable success.
Our Global banking outlook survey of 221 financial institutions across 29 markets1 reveals that bankers are positive about their ability to improve their financial performance in 2018 and beyond.
However, recent constructive conditions are unlikely to be permanent. It is far from clear whether banking returns on equity are able to withstand the impact of an unexpected cyclical downturn, let alone the potential effects of the well-telegraphed unwinding of quantitative easing.
Banks must do less themselves and make extensive use of an ecosystem of industry utilities and a diverse range of partners to support investment, deliver better services, drive out costs, manage risks and protect their organizations.

1 North America: Canada, the United States; Europe: Austria, Belgium, France, Germany, Ireland, Italy, the Netherlands, Nordics (Norway and Sweden), Poland, Spain, Switzerland, the United Kingdom; emerging markets: United Arab Emirates (UAE), South Africa, Nigeria, Russia, Turkey, Brazil, Mexico, China, India, Indonesia, Malaysia; developed AsiaPacific (APAC): Australia, Hong Kong, Japan, Singapore. Respondents account for at least
50% of the assets in each market.
As banks seek to improve their performance they must reflect on some key questions about their strategy and readiness to advance their own digital maturity:
• Does my strategy account for rapidly changing revenue and profit pools?
• What is my role in the ecosystem and how do I innovate efficiently?
• How do I implement strategic change in a rapidly evolving digital environment?
• How do I change my talent to support a more digital business?
• Am I sufficiently considering new risks and the need to embed cybersecurity in my strategy?
• How do I transform my technology and the technology organization?
We believe that banks must act now to prepare for a future led by innovation and technology and to build scalable, digitally enabled business models that will help them weather the performance challenges that lie ahead.