The McKinsey Podcast
The changing landscape for banks
Jan 11, 2024
Exploring the evolving banking landscape, this podcast discusses the challenges traditional banks face, the importance of adapting to changing customer needs and leveraging technology platforms. It also delves into the risks banks are currently facing, the changes in the banking industry globally, and strategies for navigating the changing landscape such as reacting to balance sheet changes and considering new business models.
22:56
AI Summary
Highlights
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The banking industry has experienced a significant shift with a large portion of global financial assets moving away from bank balance sheets and towards other financial entities like mutual funds and insurance balance sheets, primarily driven by rising interest rates.
- Banks need to adapt to changing distribution channels, particularly the rise of consumer digital payments and embedded finance, while also effectively managing various risks such as technology-related threats, instant payments, and compliance in partnerships and ecosystems.
Deep dives
Shift in assets off bank balance sheets
Over the last decade, more than half of the $402 trillion in global financial system assets no longer reside on bank balance sheets. Instead, these assets have been transferred to mutual funds, insurance balance sheets, pension funds, sovereign wealth funds, and private capital. This transition has been driven by rising interest rates, which increased net interest margins and boosted the sector's profits by approximately $280 billion in 2022. Technological advancements have also played a role, as banks now focus on implementing Gen.E.I. and other quickly implementable solutions.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
