United Kingdom


  • Industry: Financial Services, Banking
  • Type: Press release
  • Date: 17/10/2013

Global banking has reached the point of no return 

  • Universal model is not sustainable as countries take control of their banks
  • Retail and investment banking will split
  • Libor was the game changer for sector
  • Banking to become dull, and dull will become the new good



Speaking at the annual British Bankers’ Association conference, KPMG’s EMA head of financial services, Bill Michael, outlined his vision of how global banking will change over the next decade.


“Libor was a game changer for banking. We now have a situation where the future shape of banking is beyond the control of Boards, individual regulators or countries alone.


“We are heading to a new place where universal banking doesn’t exist as it does today. Where retail and investment banking may be split and where the interests of countries, and their banks, come first.”


Bill Michael outlined four defining features of the future shape of banking.


1. The old universal banking model will no longer be sustainable


“When Lehman’s failed, the inadequacy of the insolvency regime was painfully exposed. It demonstrated that in the face of such a crisis, each nation protects its own interests.


“Banks are just as important to countries as national defence. And just like national defence, ‘one size does not fit all’ and the mantra of a ‘level playing field’ may not be relevant.


“As the philosophy of ‘country-first’ takes hold, global banks will be forced to become less global.  In this new world retail and investment banking are not comfortable bedfellows and will likely split.”


2. Finance will become more localised and banks will exit major products and markets

“In a world where countries come first, many banks will retreat back to home markets. Finance will become localised and products will become simplified.


“This should mean great news for some customers as banks are forced to focus more on their needs. But it will also mean large universal banks must fundamentally restructure their business, which could include major divestments and exiting geographies or products.”


3. Customers will have access to fewer products that will cost more

“Retail banking is being dominated by ‘back-book reviews’ of mis-selling. While the goal of these reviews is noble, there is no end in sight.  We now run the risk of harming the very people we aim to protect – our customers.


“Customers already have access to fewer pensions and investment products as a direct result. For SME customers – the lifeblood of the economy – access to funding at acceptable pricing is increasingly difficult.


“For large corporates it gets trickier. They will demand more global services and banks will have to become more global in their offerings. However, access to risk management products will become more expensive and the likely demise of a widespread OTC market means these products will be more costly.”


4. Banking will become dull

“Banking will become dull, and dull will be the new good. Bankers will no longer be the rock stars of the commercial world and banking will become staid and adrenaline-free.


“As global banks reconfigure and become more country focused, stable returns will be demanded by investors. Volatile earnings will signal that a bank hasn’t finished adapting.


“The ‘dullness’ of banks will drive culture and behaviour, not the other way around.”



Read Bill Michael's speech in full (PDF 2.61 MB).




Notes to editor


Copies of the full speech are available on request and Bill Michael is available throughout the day for interviews.


For further information please contact


Monica Fiumara, Senior PR Manager, KPMG

Tel: +44 (0)20 7694 5674

Mobile: +44 (0)7901 105180

Email: monica.fiumara@kpmg.co.uk

KPMG Press Office: 020 7694 8773


About KPMG


KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.



Share this

Share this