A global report released by KPMG International reveals that 53 percent of banks worldwide are aiming to reduce operational costs by at least 10 percent by 2030, with 29 percent targeting reductions exceeding 20 percent. Despite these ambitions, only 24 percent have successfully met their cost reduction goals to date.
The survey, which covered 228 banks, identifies three core priorities driving transformation: embedding artificial intelligence into operations, combating cyber fraud, and enhancing data analytics capabilities. While 40 percent of banks believe they are well-positioned to lead transformation, only 18 percent report high success in executing such initiatives.
KPMG analysts noted that modest cost reductions of around 10 percent could be achieved through targeted ‘cost out’ measures or by deploying AI in specific processes. However, deeper cuts of 20 to 30 percent would require substantial operational overhauls aimed at improving efficiency, productivity, and service delivery—beyond mere headcount reductions.
AI and automation are already widely adopted across the sector. The report states that 52 percent of banks use these technologies for fraud detection and document processing, while 50 percent deploy chatbots for customer interactions. Additionally, 82 percent of banking leaders plan to form partnerships with startups to accelerate innovation.
On the earnings front, nearly half of the surveyed banks expect to grow profits by more than 2.5 percent over the next three years, with 20 percent projecting growth above 5 percent.
Hemant Jhajhria, Head of Consulting at KPMG India, emphasized that the rapid evolution of technology, regulation, and customer expectations demands a bold and strategic response. He stated that the report outlines a new transformation agenda centered on trust, innovation, and agility.
With narrowing margins and rising regulatory pressures, banks are increasingly turning to digital technologies, automation, and AI to streamline operations, reduce costs, and enhance customer experience.
