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Banking update 2024: What leaders need to know

Leading Off

Bank on it ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
Leading Off

Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel
An image linking to the web page “Global Banking Annual Review 2024: Attaining escape velocity” on McKinsey.com.

It’s often difficult to improve performance in the banking industry. Our latest research reveals that only about 10 percent of global banks have moved as much as five deciles in their return on tangible equity in the past ten years. How did they pull ahead of the pack? According to the authors of McKinsey’s Global Banking Annual Review 2024, the differentiator could lie in a strong “management quotient.” Management teams that can answer five core questions may be better positioned to propel growth in the banking sector. For example, a critical question to ask is whether the organization’s operating model is “set up to translate ideas to actions fluidly,” note the authors. “Does it sometimes feel like you’re wading in mud when trying to get things done internally? What exactly is getting in your way? What can be learned and adapted from more nimble executors?”
An image linking to the web page “The new importance of partners in banking” on McKinsey.com.

The rapid spread of embedded finance and banking as a service—wherein nonfinancial companies offer financial services to customers—means that banks may need to partner with third parties in areas that fall outside their core capabilities. In a discussion with McKinsey, banking leaders offer their perspectives on how this trend may affect the industry as a whole. “Customers want a seamless experience in every facet of their lives, and that absolutely relates to banking right now,” says Sabrina Dar, an executive at core banking technology provider Mambu. “They’re demanding personalization and intimacy. And they want speed.” Ray O’Brien, COO of data analytics firm Quantexa, adds, “Banks are thinking more today, ‘We should focus on the things we really care about, and we can get other companies to help us do the rest, weaving it together into one platform.’”
An image linking to the web page “The cyber clock is ticking: Derisking emerging technologies in financial services” on McKinsey.com.

Lead by banking on change.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:43 - 18 Nov 2024