AI focus surges while workforce, cyber, and ESG risks rise
Global bank chiefs are surprisingly bullish about the next three years – and they’re betting big on AI, cyber, and ESG – according to KPMG’s 2025 Banking and Capital Markets CEO Outlook.
At home, Prime Minister Christopher Luxon is also talking up the outlook, declaring New Zealand’s “economic recovery has now arrived” as business confidence hits decade‑high levels.
Bank CEOs upbeat on growth and deal-making
KPMG reports that “83% of CEOs surveyed are confident in their company’s growth prospects,” up from 78% last year, with confidence in the wider banking sector also jumping.
Earnings expectations have strengthened, and appetite for mergers and acquisitions remains high – but is shifting toward “moderate‑impact” deals, often targeting fintechs, digital lenders, and regtech firms to accelerate innovation without overextending capital.
AI now central to banking strategy
KPMG says “AI has become central to banking strategy, transforming the operations and employee and customer experience.”
Around 65% of CEOs now rank AI as a top investment priority, and 70% expect to allocate 10–20% of budgets to AI over the next 12 months. Strikingly, 69% expect to see returns on those investments within one to three years, up from just 13% in 2024.
Banks are scaling AI across end‑to‑end value streams – from onboarding and KYC to credit assessment, fraud detection, and back‑office processing. That should mean faster decisions, more granular risk‑based pricing, and more personalised offers, but also more model‑driven calls that advisers will need to explain clearly to clients.
Ethics and governance are the biggest brakes on rollout. KPMG finds “ethical challenges (56%), data readiness (55%), and lack of regulation (55%) are the biggest obstacles to implementation,” underlining that the main bottlenecks are now organisational and cultural, not purely technical.
Workforce, cyber, and ESG now core risk themes
The workforce agenda is being rewritten by AI.
Seventy‑eight% of CEOs worry that AI workforce readiness or upskilling could hurt their organisations if not addressed, yet 83% are prioritising reskilling rather than cuts – redeploying people into higher‑value roles like interpretation, risk and product design.
Cybersecurity remains the number‑one risk to growth, with KPMG noting “fraud detection (95%) and identity theft (94%) topping the risk agenda.”
On ESG, 60% of CEOs say sustainability is now embedded into the business, and three‑quarters view AI as a driver of “responsible innovation”, helping identify resource‑efficiency opportunities and support climate‑aligned products.
For Kiwi mortgage advisers, the message is clear: expect faster, more data‑driven banking – but also tighter scrutiny around cyber, ESG and how AI‑driven decisions are explained to clients.
Access the full KPMG 2025 Global CEO Outlook here.
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