Banking transformation: The new agenda

As the global banking industry accelerates its journey toward operational and cost transformation, New Zealand faces new challenges in its banking industry. The sector is preparing for a shift with the introduction of regulated open banking end of 2025 and more regulation on the horizon.  

This legislation will empower consumers to securely share their banking data with accredited third parties, fostering innovation, enhancing competition, and enabling more personalised financial services. This regulatory milestone aligns with the broader global trends highlighted in KPMG's new global report Banking transformation: The new agenda.

The report, based on insights from over 228 banking leaders worldwide, underscores the urgency for banks to modernise their operating models, reduce costs, and improve customer experience. In New Zealand, these imperatives are particularly relevant as banks prepare to implement standardised APIs and data-sharing protocols, moving beyond voluntary frameworks to a regulated, interoperable ecosystem.

The transition to open banking presents a unique opportunity for New Zealand's financial institutions to reimagine their legacy systems. Many banks are still reliant on outdated core platforms that limit agility and scalability. Upgrading these systems is no longer optional—it is essential for enabling secure data exchange, embedding AI-driven customer insights, and delivering seamless digital experiences. 

Cost transformation is not merely about efficiency, it is about strategic reinvention. High-performing banks, as identified in the report, are those with centralised transformation models, clearly defined cost strategies, and aligned leadership. These attributes are critical for New Zealand banks seeking to navigate the complexities of regulatory compliance, digital innovation, and evolving customer expectations.

Moreover, the dual focus on reducing cost to serve while enhancing customer experience resonates strongly in the New Zealand context. As digital channels become predominant, banks must balance automation with empathy, leveraging AI to detect customer vulnerability, streamline interactions, and personalise services. The report's emphasis on embedding AI into new ways of working and improving data and analytics capabilities is particularly salient for New Zealand, where fintech partnerships and digital sprints are gaining momentum.

New Zealand's banking sector is entering a transformative era. The convergence of regulatory reform, technological advancement, and strategic cost management offers a rare opportunity to reshape the industry for the better.

We hope this read inspires you and feel free to reach out to us if you want to have a deeper conversation on the topic.