Insight

Banking & Capital Markets: Sector playing positive role

Explore the continual evolution of banking through the COVID-19 challenge.

Peter Torrente

Peter Torrente

National Sector Leader, Banking & Capital Markets, Partner, Audit, KPMG US

+1 212-872-5815

Quick, strategic action by the banking industry during COVID-19 is allowing customers and communities to receive crucial services in unprecedented times. Peter Torrente, National Sector Leader for Banking & Capital Markets, explores how governance, risk management, HR, IT, trading and other functions are adapting and looks ahead at the banking agenda for the post-COVID world.

Video transcript

Over the past several weeks, we've really seen banks first and foremost look after the health and well-being of their employees, moved quickly to remote working environments, implement their business continuity planning, and really be able to continue to best serve their customers and their communities. 

We've seen action by the US Treasury and swift action by the Federal Reserve and other regulators, to stabilize the financial markets and allow banks to continue to best support their individual and corporate customers.

Certainly the investments banks made coming out of the financial crisis and things like their risk management and governance systems, as well as adherence to the enhanced capital and liquidity requirements, are allowing banks to play a positive role as we move through the current health and economic situation. 

That being said, we see banks agendas quite full as we talk to our clients with things like operational matters. There's been an uptick in volumes in many areas, be it a call center activity, be it increased loan volume activity whether it's through repayments or refinances or forbearances. 

And then for those standing up operations around the Paycheck protection plan, we've certainly seen increased volumes there. 

On the trading side increased volumes due to to market volatility as well. And then they're really looking at scenario planning and reforcasting capital liquidity and earnings and how the current environment are affecting original plans be it through reduction in interest rates, potential uptick in credit losses, the waiver of fees, draw downs on corporate lines of credit, all impacting those analyses. 

And then lastly, virtual close as we go into the first quarter earnings season. Certainly most adopting CECL for the first time in a remote working environment.

And then dealing with the other financial reporting and internal control considerations that present themselves in the current environment as well. 

And then we see bank management starting to look forward and what do things and their operations look like when we come out of their current health and economic situation. 

And what what does their location strategy look like. What what are new ways of working looking at operational and technology resiliency and learnings coming out of the current situation. Acceleration of digitization and potential M&A opportunities for some. 

We think the banking industry will get through this current period together for better.

 

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