By Jeremiah Ndjoze

KPMG South Africa, this week, released its latest global report under the theme, Banking Transformation: The New Agenda, which provides in-depth insights and practical recommendations for banks seeking to achieve operational excellence and sustainable cost management. 

While drawing on a global survey of 228 banking leaders and regional expertise, including lessons from markets where transformation initiatives have delivered tangible results, the report according to KPMG, outlines practical strategies for African banks to navigate growing economic pressures, regulatory change, and intensifying competition from fintech and digital-first challengers
It further brings to the fore that, while transformation is a universal imperative, only 18% of banks globally have been highly successful in achieving their transformation objectives. Furthermore, 53% of banks aim to cut costs by at least 10% by 2030, yet only 24% have so far met their cost reduction targets. With just 40% of banks feeling well-positioned to drive transformation effectively, there is a clear need for greater strategic alignment and leadership accountability.

Auguste Claude-Nguetsop, Partner and Head of Financial Services Sector – Advisory for KPMG in Southern Africa says this presents both a challenge and an opportunity for African banks:
“The African banking sector is at a pivotal moment. Banks are under increasing pressure to manage costs, embrace innovation, and deliver better customer experiences, all while navigating economic volatility and regulatory demands. This report provides a roadmap to achieve transformation that goes beyond cost-cutting – it is about building smarter, leaner, and more resilient institutions that can thrive in a fast-evolving financial landscape.”

KPMG further has it that the report highlights global trends in the sector that has African relevance, such as the ability to define clear, through knowing who the bank serves and how to serve them. 
It further promotes the assurance of alignment through the integration of cost and transformation objectives so they reinforce each other rather than compete.

Understanding value levers and driving enterprise-wide execution has been highlighted as trends that African banks can borrow, in addition to their ability to leverage experienced partners.  

Kabir Okuniola, Partner and Head of Financial Services Industry Audit at KPMG Nigeria, says many African banks are already taking steps in the right direction but must ensure their efforts are sustainable.

“Numerous transformation initiatives prioritise end-to-end process optimisation through digitalisation, automation, and cost reduction. Banks must consistently focus on the critical link between operational transformation and cost efficiency to drive sustainable progress and deliver value for customers and shareholders.” Okuniola’s sentiments were echoed by Joseph Kariuki, who is a Partner and Head of Banking Sector at KPMG East Africa, who maintains that strong governance and leadership are essential to navigating the complexities of transformation:

“Banks with clear strategies and centralised governance structures tend to see significantly better results. Full alignment of cost and transformation goals is crucial, particularly when assessing hybrid approaches that combine digital innovation with traditional banking models.”

The report is widely regarded as a unique opportunity for Africa. The report, according to its proponents highlights that African banks have distinct advantages as they reshape their operating models, including the ability to leapfrog legacy infrastructure through mobile-first solutions and fintech partnerships. This despite the fact that, the region also faces challenges such as balancing innovation with financial inclusion, infrastructure gaps, and the need for rapid skills development.
Adds Claude-Nguetsop: “Africa has a dynamic and fast-growing financial ecosystem. By aligning cost strategies with transformation objectives, banks can unlock efficiencies while driving inclusive growth and digital adoption. This is the moment for African banks to build models that are both resilient and future ready.”