KPMG CEO Outlook 2023: 73% Confident of Growth in Next 3 Years, Top 5 Risks to Growth are Geopolitics & Political Uncertainty, Operational Issues, Emerging & Disruptive Technology, Supply Chain & Regulatory Concerns
29th December 2023 | Hong Kong
KPMG has released the KPMG CEO Outlook 2023, providing key insights of 1,325 CEOs and 142 Banking CEOs on their business and economic outlook for the next 3 years (2024 to 2026), with all CEOs leading companies with annual revenue of more than $500 million and 1/3 of CEOs with more than $10 billion annual revenue. Of the 1,325 CEOs, 73% are confident of growth in the next 3 years (2022: 71%, 2021: 60%). 2023 Top 10 Risks to Growth (Next 3 years) are Geopolitics & political uncertainty, Operational issues, Emerging / disruptive technology, Supply chain, Regulatory concerns, Environmental / climate change, Interest rates, Cyber security, Reputational risk, and Talent. CEOs on Generative AI (Artificial intelligence) – Provide new attack strategies for adversaries 82%, Top priority 70%, Ethical challenges – 57%. CEOs more likely to reward employees who come to office (assignments, raises, promotion) – 87%. Embedded ESG in organization means value creation – 69%. KPMG Banking CEO Outlook 2023, 76% of CEOs are confident of growth in the next 3 years. Will have prolong potential recession if interest rates increase & tightening of monetary policies – 80% of CEOs. Top 5 Biggest risk / most pressing concern – Cost of living 79%, Disruptive technology 76%, Regulatory demands 74%, Talent 74%, Cyber crime & cyber insecurity 71%. CEOs deploying capital investment to acquire new technology – 54%. CEOs on Business growth and M&A (Inorganic growth) – Must witness stable market conditions 28%, Availability of financing 20%. Top 4 Strategic planning priorities – Collaborative leadership style, Micro-level decision-making, Attract & retain talent, Improving the customer experience & organic growth. Banking CEO work location preferences – In-Office 58%, Hybrid 34%, Fully remote 7%. Expected return on investment after implementing Generative AI (Artificial intelligence) – 51% expect returns in 3 to 5 years. Cyber attack readiness – Well-prepared 54%, Neutral 25%, Under-prepared 21%. ESG embedded into business – 63%. Expecting significant rate of return on ESG investments within 3 to 5 years – 53%. Top 4 Net Zero challenges – 1) Complexity of de-carbonizing supply chains lending & investment portfolio, lack of skills & expertise to implement solutions, 2) Lack of technology solutions, 3) Recruitment challenges , 4) Higher costs, difficulty in raising financing & competition. Top 7 Greatest Impact of ESG strategy – 1) Build customer relationships, 2) Shape capital allocation, partnerships, alliances and M&A strategy, 3) Drive financial performance, 4) Attract next generation of talent, 5) Building brand reputation, 6) Strengthen employee engagement and employee value proposition, 7) Drive total shareholder return. See below key key findings & summary | View CEO report | Banking CEO report
“ 73% Confident of Growth in Next 3 Years, Top 5 Risks to Growth are Geopolitics & Political Uncertainty, Operational Issues, Emerging & Disruptive Technology, Supply Chain & Regulatory Concerns “
KPMG CEO Outlook 2023
KPMG has released the KPMG CEO Outlook 2023, providing key insights of 1,325 CEOs and 142 Banking CEOs on their business and economic outlook for the next 3 years (2024 to 2026), with all CEOs leading companies with annual revenue of more than $500 million and 1/3 of CEOs with more than $10 billion annual revenue.
Summary:
- CEO Growth Confidence (Next 3 years) – 73% voted confident
- Will have prolong potential recession if interest rates increase & tightening of monetary policies – 77%
- 2023 Top 5 Risks to Growth (Next 3 years) – Geopolitics & political uncertainty, Operational issues, Emerging & disruptive technology, Supply chain, Regulatory concerns
- 2022 Top 5 Risks to Growth (Next 3 years) – Emerging & disruptive technology, Operational issues, Regulatory concerns, Environmental & climate change, Reputational risk
- CEOs on Generative AI (Artificial intelligence) – Provide new attack strategies for adversaries 82%, Top priority 70%, Ethical challenges – 57%
- CEOs more likely to reward employees who come to office (assignments, raises, promotion) – 87%
- 3 years away from full return to office – 64%
- Embedded ESG in organization means value creation – 69%
- ESG progress not strong enough to withstand potential scrutiny – 68%
Banking CEO Outlook 2023:
- Banking CEO Growth Confidence (Next 3 years) – 76% voted confident
- Will have prolong potential recession if interest rates increase & tightening of monetary policies – 80%
- Top 5 Biggest risk / most pressing concern – Cost of living 79%, Disruptive technology 76%, Regulatory demands 74%, Talent 74%, Cyber crime & cyber insecurity 71%
- CEOs deploying capital investment to acquire new technology – 54%
- CEOs on Business growth and M&A (Inorganic growth) – Must witness stable market conditions 28%, Availability of financing 20%
- Top 4 Strategic planning priorities – Collaborative leadership style, Micro-level decision-making, Attract & retain talent, Improving the customer experience & organic growth
- Banking CEO work location preferences – In-Office 58%, Hybrid 34%, Fully remote 7%
- Expected return on investment after implementing Generative AI (Artificial intelligence) – 51% expect returns in 3 to 5 years
- Top 8 Benefits of Generative Al in organization – Increased profitability, Fraud detection & cyber attack response, New product & market growth opportunities, Increased innovation, Faster data analysis, Increased efficiency & productivity, Job creation, Personalized services / customer engagement
- Cyber attack readiness – Well-prepared 54%, Neutral 25%, Under-prepared 21%
- ESG embedded into business – 63%
- Expecting significant rate of return on ESG investments within 3 to 5 years – 53%
- Top 4 Net Zero challenges – 1) Complexity of de-carbonizing supply chains lending & investment portfolio, lack of skills & expertise to implement solutions, 2) Lack of technology solutions, 3) Recruitment challenges , 4) Higher costs, difficulty in raising financing & competition
- CEO will take on political or socially contentious issue despite concerns by board (ESG) – 73%
- CEO will divest profitable businesses if damaging bank’s reputation (ESG) – 73%
- Top 7 Greatest Impact of ESG strategy – 1) Build customer relationships, 2) Shape capital allocation, partnerships, alliances and M&A strategy, 3) Drive financial performance, 4) Attract next generation of talent, 5) Building brand reputation, 6) Strengthen employee engagement and employee value proposition, 7) Drive total shareholder return
- Gender equity in C-suite will help meet growth requirements – 79%
- Responsibility to drive greater social mobility as business leaders – 78%
- Progress on diversity & inclusion are moving too slowly – 65%
KPMG CEO Outlook 2023
1) CEO Outlook 2023
CEO Growth Confidence (Next 3 years):
- Feb 2021 – 42%
- Aug 2021 – 60%
- Feb 2022 – 60%
- Aug 2022 – 71%
- Sept 2023 – 73%
2023 Top 10 Risks to Growth (Next 3 years):
- Geopolitics & political uncertainty
- Operational issues
- Emerging / disruptive technology
- Supply chain
- Regulatory concerns
- Environmental / climate change
- Interest rates
- Cyber security
- Reputational risk
- Talent
2022 Top 10 Risks to Growth (Next 3 years):
- Emerging / disruptive technology
- Operational issues
- Regulatory concerns
- Environmental / climate change
- Reputational risk
- Internal unethical culture
- Political uncertainty
- Interest rates
- Return to territorialism
- Supply chain
CEOs on Generative AI (Artificial intelligence):
- AI provides new attack strategies for adversaries – 82%
- Top priority – 70%
- Ethical challenges – 57%
CEOs on Talent Management:
- More likely to reward employees who come to office (assignments, raises, promotion) – 87%
- 3 years away from full return to office – 64%
CEOs on ESG:
- Embedded ESG means value creation – 69%
- ESG progress not strong enough to withstand potential scrutiny – 68%
2) Banking CEO Outlook 2023
Banking CEOs Confidence Level (Next 3 years):
- Confident – 76%
- Neutral – 18%
- Not Confident – 6%
Will have prolong potential recession if interest rates increase & tightening of monetary policies
- Agree – 80% (Global: 77%)
- Neutral – 15%
- Disagree – 5%
Top 5 Biggest risk / most pressing concern for organizations:
- Cost of living – 79% (Global: 77%)
- Disruptive technology – 76%
- Regulatory demands – 74%
- Talent – 74%
- Cyber crime & cyber insecurity – 71%
3) Banking CEOs Business Priorities
Priority areas for growth in near-term:
- More capital investment to acquire new technology – 54%
- More capital investment to develop workforce skills & capabilities – 46%
Business growth and M&A (Inorganic growth):
- Must witness stable market conditions – 28%
- Availability of financing – 20%
Top 4 Strategic planning priorities:
- Collaborative leadership style, with shared management & operational responsibilities enables greater success – 74%
- Micro-level decision-making is required for success – 48%
- Top operational priority is to attract & retain talent – 29%
- Improving customer experience & organic growth – 11%
Banking CEO work location preferences:
- In-Office – 58%
- Hybrid – 34%
- Fully remote – 7%
4) Banking CEOs on Technology (AI & Cyber):
Expected return on investment after implementing Generative AI (Artificial intelligence):
- Less than 1 year – 1%
- 1 to 3 years – 25%
- 3 to 5 years – 51%
- More than 5 years – 25%
Top 8 Benefits of Generative Al in organization:
- Increased profitability – 19%
- Fraud detection & cyber attack response – 18%
- New product & market growth opportunities – 15%
- Increased innovation – 11%
- Faster data analysis – 11%
- Increased efficiency & productivity (through automating routine operations) – 10%
- Job creation – 10%
- Personalized services / customer engagement – 6%
Cyber attack readiness:
- Well-prepared – 54%
- Neutral – 25%
- Under-prepared – 21%
5) Banking CEOs on ESG & Net Zero
Banking CEO ESG / Net Zero Insights:
- ESG embedded into business – 63%
- Significant rate of return on ESG investments within 3 to 5 years – 53%
- Significant rate of return on ESG investments within 3 years – 25%
Top 4 Net Zero challenges:
- Complexity of de-carbonizing supply chains lending & investment portfolio, lack of skills & expertise to implement solutions – 28%
- Lack of technology solutions – 27%
- Recruitment challenges – 27%
- Higher costs, difficulty in raising financing, competition – 17%
ESG actions:
- Will take on political or socially contentious issue despite concerns by board – 73% (Global: 61%)
- Will divest profitable businesses if damaging bank’s reputation – 73% (Global: 71%)
- Can tackle challenges simultaneously – 48%
- Will emphasize governance models & transparency protocols – 32%
Top 7 Greatest Impact of ESG strategy:
- Build customer relationships – 29%
- Shape capital allocation, partnerships, alliances and M&A strategy – 20%
- Drive financial performance – 17%
- Attract next generation of talent – 14%
- Building brand reputation – 10%
- Strengthen employee engagement and employee value proposition – 6%
- Drive total shareholder return – 5%
Diversity & Inclusion
- Gender equity in C-suite will help meet growth requirements – 79%
- Responsibility to drive greater social mobility as business leaders – 78%
- Progress on diversity & inclusion are moving too slowly – 65%
KPMG 2023 CEO Outlook
The 9th edition of the KPMG CEO Outlook, conducted with 1,325 CEOs between 15 August and 15 September 2023, provides unique insight into the mindset, strategies and planning tactics of CEOs. All respondents have annual revenues over US$500M and one-third of the companies surveyed have more than US$10B in annual revenue. The survey included leaders from 11 markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, UK and US) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications).
KPMG 2023 Banking CEO Outlook
We surveyed 142 banking CEOs, to collect their perspectives of their business and the economic landscape over the next three years. We gained deep insights from this diverse cohort of banking leaders, who represent countries in the Americas, Europe and Asia (60 percent from the US, UK, Canada and Germany), are spread across the retail, commercial and corporate banking sub-sectors, with 71 percent hailing from organizations with revenues from US$0.5-$9.99 billion.
About KPMG International
KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively. KPMG firms operate in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
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