The McKinsey Podcast
What's next for global banking?
Feb 28, 2025
Join Klaus Dallerup, a McKinsey Senior Partner renowned for his insights on global banking trends, and Pradip Patiath, another Senior Partner specializing in digital financial services, as they explore the future of banking. They discuss the industry's recent profitability contrasted with emerging skepticism. Key topics include the productivity challenges banks face despite tech investments, the intense competition for talent, and the transformative potential of cryptocurrency. Discover strategies for navigating volatility and evolving client expectations in this dynamic landscape.
25:51
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Quick takeaways
- Despite significant profitability in global banking, labor productivity has declined, raising concerns about efficiency despite substantial technology investments.
- Banks face competitive pressure from fintech and big tech, necessitating a strategic rethink to adapt to evolving market dynamics and customer expectations.
Deep dives
Current Banking Success and Profitability
The banking sector is currently experiencing significant profitability, generating around $7 trillion in revenue globally, which makes it one of the largest profit-generating industries. This success is largely attributed to improved interest rates and net margins that have enhanced banks' financial health compared to previous years. Banks have also adapted by focusing on less risky assets, contributing to their stronger balance sheets and overall resilience. Furthermore, the global banking industry has over $400 trillion in assets, emphasizing its crucial role in facilitating commerce worldwide.
