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Welcome to the ninth edition of HSF Kramer's Global Bank Review
Over the past year, one truth has become unmistakably clear for the banking industry: managing complexity is not a transient state; it is simply the air the modern bank must breathe. Such complexity sweeps in from all directions – from geopolitical instability to the relentless pace of technological advancement, to increasingly contradictory pressures on ESG, to the need to create an attractive, economic and climate-friendly office for the workforce.
Artificial intelligence (AI) exemplifies this dynamic. Few innovations have generated as much anticipation for the industry, yet the reality has been sobering at times as large, regulated banks have faced the challenge of implementation. In theory, banks, sitting on rich pools of customer data, should be uniquely placed to deploy AI tools but legacy technology stacks and the organisational complexity of leading banks have posed obstacles. Fraud detection and risk management have emerged as bright spots, but transformational gains – particularly in customer experience and operational efficiency – have proved elusive. Few doubt the ultimate potency of AI – and its ability to reshape business operations and working practices – but a sure path to success is yet to emerge.
Fractious geopolitics have likewise clouded the outlook for management, many of whom are still addressing how to transition expansive cross-border operations to an era of regional blocs and messy deglobalisation. Some financial institutions have unsurprisingly retrenched to core domestic heartlands, where the policy and commercial environments are at least more familiar, if not more hospitable. Geopolitical volatility has also further clouded the outlook on broader trends like the rise of ESG, which, while presenting substantive challenges for the industry, at least until recently was travelling broadly in the same direction. Amid a crumbling global consensus on the imperative to adapt to climate change risks, banks now find themselves facing regulatory frameworks which often impose contradictory demands and societal expectations.
Beyond these headline themes, some structural shifts are reshaping the competitive landscape. Private credit and digital assets continue to expand at a startling pace – sometimes complementing banks' activities, sometimes competing with them. Opportunities abound but also raise questions about concentrations of risk in less transparent markets (and banks' own exposures). At the same time, while banking remains one of the most resilient sectors, cybersecurity costs are projected to surge through the decade as increasingly sophisticated actors target critical infrastructure. In addition, managing workforces brings its own peculiarly 2020s challenges, as institutions champion a return to the office while gauging what new generational attitudes and digital capabilities mean for the modern office's occupancy, footprint and working environment.
If there is a silver lining, 2024 and 2025 proved the first years since the global financial crisis when the grip of regulatory enforcement palpably eased on the industry. But if the regulatory onslaught has passed, it remains the case that banking's central role in modern infrastructure and economies imposes expectations on social licence which will endure.
In an era of complexity, successful innovation and the astute application of technology within banks' business models, coupled with strategic clarity and the stamina to execute, will matter more than ever. The following chapters of our annual Global Bank Review explore these themes in more detail, offering insights into how financial institutions can thrive in a turbulent atmosphere.
Explore our Global Bank Review 2025
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