Banks ramp up competition
But banks are unlikely to have the skilled advisers necessary.
KPMG partner John Kensington, an author of the newly-released Financial Institutions Performance Survey (FIPS), said that with little prospect of big increases in profitability from their core activities, banks were expanding into non-traditional services.
“Banks make the majority of their money from net interest income, which you can increase by either pushing margins up or having growth [in home loans]. When you don’t have either of those there is a need to look elsewhere,” he said.
These other services include personal loans, insurance and fund management as well as financial planning. But he said it was not always smooth sailing for banks in those areas..
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