5 fundamental pressures identified by McKinsey:
Customer expectations for digitally managed services
Regulatory requirements of a high-performing risk function, timely and accurate data
Lending continues to be a key source of bank revenue across the retail, small and medium-size enterprises (SME), and corporate segments. And it is a less automated segment of banking activity.
For further expansion despite the new pressures, banks need to digitize their credit processes and to bring bigger transparency to risk profiles.
Current share of risk and compliance costs in total banking costs is 15%.
External and internal pressures push banks to reevaluate the cost efficiency and sustainability of their risk-management models and processes.
Growing importance of strong data management and advanced analytics in staying competitive
New digital attackers disrupting traditional business models
Increasing pressure on costs and returns, especially from
financial-technology (fintech) companies