Outlook for global capital markets

More than 15 years after the global financial crisis, the banking sector has entered a new era. While the industry proved resilient during recent economic shocks—including the COVID-19 pandemic, rising inflation, rapid interest rate increases and periods of market volatility—the competitive landscape continues to evolve. Banks are generally better capitalised, more profitable and subject to stronger risk management practices than they were before 2008.

However, performance continues to vary across regions. Many US banks have benefited from higher interest rates, robust investment in technology and greater operating efficiency, although regional bank failures in 2023 highlighted that liquidity and interest rate risks remain significant. European banks have experienced improved profitability as higher rates boosted net interest margins, but many continue to face challenges from slower economic growth, increasing regulatory requirements and the ongoing need to modernise legacy systems. Across Asia and the Middle East, many banks have accelerated digital innovation and expanded into new markets, creating increasingly strong competition on the global stage.

Regulatory Evolution

The global regulatory landscape continues to evolve in response to emerging risks. Regulators are balancing financial stability with the need to encourage innovation and economic growth. Following the banking turbulence of 2023, supervisory authorities have placed greater emphasis on liquidity management, operational resilience and stress testing.

At the same time, regulation is expanding beyond traditional financial risks. Artificial intelligence governance, cybersecurity, climate-related financial disclosures and environmental, social and governance (ESG) reporting have become strategic priorities for banks worldwide. In Europe, regulators continue to strengthen digital resilience through initiatives such as the Digital Operational Resilience Act (DORA), while implementation of the Basel III reforms remains a key focus across major financial markets. The challenge for banks is to remain compliant while maintaining competitiveness in an increasingly complex regulatory environment.

Technology Development

Technology continues to reshape the banking industry at an unprecedented pace. Cloud computing, open banking and data analytics have become mainstream, while Generative AI is rapidly transforming customer service, fraud detection, compliance, software development and internal operations.

Financial institutions are investing heavily in automation and intelligent workflows to improve efficiency and reduce costs. Artificial intelligence is enabling faster decision-making and more personalised customer experiences, while machine learning strengthens credit assessment and financial crime detection. Blockchain technology continues to support selected applications such as digital assets, tokenisation and cross-border payments, although adoption remains uneven. As cyber threats become more sophisticated, cybersecurity investment has become a strategic priority alongside digital transformation.

Future Talent

The future of banking depends not only on technology but also on people. As automation and AI reshape traditional roles, banks are increasingly seeking employees with adaptable, digital and analytical skill sets. Demand has grown for expertise in artificial intelligence, cybersecurity, cloud engineering, data science and digital product management.

At the same time, human capabilities remain essential. Skills such as critical thinking, collaboration, communication, leadership and continuous learning are becoming key differentiators. Banks are placing greater emphasis on reskilling and upskilling existing employees to ensure they can work effectively alongside emerging technologies.

Creating an inclusive, flexible and purpose-driven workplace has also become a strategic priority. Organisations that invest in employee wellbeing, hybrid working, lifelong learning and leadership development will be better positioned to attract and retain top talent in an increasingly competitive market.

Looking Ahead

The banking sector enters 2024 from a position of greater resilience but faces a rapidly changing environment. Economic uncertainty, geopolitical tensions, evolving regulation, cyber threats and accelerating technological innovation continue to reshape the industry. Banks that successfully combine strong governance, digital innovation, operational resilience and a future-ready workforce will be best placed to compete and deliver sustainable growth in the years ahead.