The state of global wholesale banking: 2023

This State of Global Wholesale Banking report was also contributed to by our global Financial Services team Danielle Nassif, Partner, Paris, Damian Ringwood, Partner, Dublin, and Julie Murray, Principal, Johannesburg.

Following interviews with wholesale banking leaders from around the world, our experts have captured their views on deglobalization, the growth of ESG, the impact of hybrid working, the rapidly changing mindset of junior colleagues, and the evolution of leadership.

How do wholesale banking leaders feel about the future of the industry?

Views are mixed on industry outlook, with senior bankers providing both positive and negative outlooks. Some foresaw a new golden era for wholesale banking with inflation and the cost of debt increasing, while others saw these same factors as reasons to be less optimistic, arguing the cost of funding would be a serious challenge.

While views on the future of wholesale banking were polarized, there was a general consensus that mounting regulatory pressure was becoming a challenge.

On the one hand, this is increasing the time to market for new products and services and generally slowing down developments, but also, it is creating demand for compliance and risk talent.

Bankers also broadly agreed that some form of collaboration would occur within the pan-European market. This would either come in the form of consolidations or sharing of infrastructure and resources.

How is wholesale banking leadership changing?

Across the board, senior banking leaders agreed they felt a changing leadership paradigm, which is linked to junior colleagues and their expectations about work and those who lead them.

Banking leadership now requires a more inclusive approach based on building a connection with people.

Leaders are expected to act as guides and facilitators for younger colleagues rather than applying a command-and-control style. Importantly, they must clearly embody certain values and beliefs.

Part and parcel of this modern leadership approach is how banking leaders manage career progression, remote working, and corporate values – particularly around ESG. Junior colleagues expect swift career progression, greater work-life balance, hybrid working, and to work for an organization that is giving back to society. It is clear from our interviews that navigating these issues is driving a new style of leadership.

How important is ESG in wholesale banking?

Wholesale banking is playing a central role in tackling societal issues. Much of this, as many bankers noted, is focused on the climate crisis but would soon cover social aspects as the cost of living hit economies.

There wasn’t a single interviewee whose bank wasn’t taking ESG seriously. This is driven in part by client demand and in part by the need to attract talent.

For investors and stakeholders, ESG is a critical priority therefore wholesale banks are making it a critical priority. Likewise, junior candidates factor a bank’s ESG commitments into their job decisions, making ESG core to talent attraction and retention.

More than one banker highlighted the inconsistencies in tackling ESG. For example, switching to clean energy sources but ensuring consumers had access to affordable energy. Or investing in electric vehicles but recognizing the heavy mining cost to the environment.

One thing is clear - bankers will play a central role in navigating the complexities of ESG challenges.

Interested in sharing your thoughts?

We’d love to hear your feedback on this whitepaper, so please don’t hesitate to get in touch with a member of the Wholesale Banking Practice or find your local Odgers Berndtson contact, or one of the authors.

Stay up to date: Sign up here for our newsletter OBSERVE, and receive the latest news in leadership and top talent, industry insights, and events directly to your inbox.