Editor Andrea Fiano's monthly letter to you, the reader.
VOL. 35 NO. 5
Our annual ranking of the World Best Banks coincides every year with the release of year-end statements for most of these banks. This year, those annual reports delivered some surprising results, particularly in advanced economies: In an otherwise very tough year for the world economy, the banks did relatively well for themselves and their shareholders. The exceptions are few and in most cases the result of unique problems or scandals. The analysts and economists, it turns out, were too pessimistic.
The reasons for the banking sector’s general good news are several: intense capital markets activity, tied to low interest rates worldwide, and particularly robust M&A; government support through the pandemic to ensure the banks continued lending to prop up business; their role as pass-throughs for support that central banks provide national economies. These features of the year 2020 ended up benefiting financial institutions.
All this does not guarantee much for the current year, but if this is performance in a dismal year, banks are well positioned to grow with the expected global rebound this year.
We celebrate the achievers in each region and in most countries of the world, and confirm once again that under any market condition there are always outperformers in any sector of the economy.
Our cover story on artificial intelligence analyzes the progress in leveraging the promise of AI, and the different and unexpected areas of its implementation in financial services. Here, too, there are surprises, including the fact that a lot of AI is already here, being implemented around us; but…we do not notice it.
There is also—and it is a common Covid-era theme—the sense that the speed of implementation has considerably increased in the last year. During the widespread lockdown, many data-intensive functions at financial institutions were fulfilled thanks to AI solutions. On that front, too, the future is already here.