However, the pandemic is reshaping the industry on a number of dimensions: ushering in a new competitive landscape, stifling growth in some traditional product areas, prompting a new wave of innovation, recasting the role of branches, and of course, accelerating digitization in almost every sphere of the B&CM space. Moreover, uncertainty about the effects of the pandemic will likely remain for the foreseeable future. Deloitte’s proprietary forecasts for the baseline economic scenario indicate that the average return on equity (ROE) in the US banking industry could decline to 5.6% in 2020 but then recover to 11.7% in 2022. Similarly, sell-side broker estimates suggest that the average ROE of the top 100 banks in North America, Europe, and APAC could decline by almost 3pps, to 6.8% in 2020.
But this should not prevent bank leaders from reimagining the future and making bold bets. They should institutionalize the lessons from the pandemic and build a new playbook by strengthening resilience now and accelerating the transformation in the post-COVID-19 world.