Despite such challenges as high interest rates, a sluggish M&A market, and increased regulatory scrutiny, bank executives are feeling optimistic about the road ahead. That’s according to KPMG’s 2024 US Banking Industry Outlook Survey, published last month, which polled 200 senior executives at US banks of varying sizes in March 2024.

Two-thirds of respondents (66%) said they were confident their banks would grow this year, with a third (33%) stating that they were “very confident.” However, confidence levels varied sharply by bank size: 93% of respondents at banks with assets over $50 billion were confident about their growth prospects, compared with around half (48%) of those at banks with assets under $50 billion.

“We anticipate an upswing in the latter half of the year in the financial services market,” Henry Lacey, banking deal advisory leader at KPMG, said in the firm’s report. “It won’t be as fast and hard as we thought at the beginning of the year. But banks will see that bounce.”

According to the report, 6 in 10 respondents said they planned to increase headcount this year. KPMG predicts that most of that hiring will be for back-office and regulatory roles, rather than customer-facing roles, which are vulnerable to automation.

For more on banker optimism, click here.—CV

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Companies are still shoveling gobs of cash into building out the data centers and other infrastructure for an AI revolution. But voices on Wall Street and elsewhere are once again asking: Is that revolution ever actually coming?

A trio of recent research notes and expert missives have questioned whether the billions of dollars being poured into AI will ultimately pay off. The upshot of these notes seems intended to pour some cold water on runaway hype around data center investment, with warnings that generative AI tech still faces a long road ahead strewn with question marks about its ultimate value.

In a report titled “Gen AI: Too Much Spend, Too Little Benefit?” Goldman Sachs analysts entertained arguments that AI isn’t up to the complex problems it’s been tasked with solving and wondered about its still-TBD “killer application.”

Another colorfully titled research note from Barclays—“Cloud AI Capex: FOMO or Field-Of-Dreams?”—asked whether data center investment is creating a bubble that could end like the telecom crash that followed the 1990s dot-com era. Spoiler alert: “We are leaning FOMO,” the bank’s analysts wrote.

To keep reading Tech Brew’s story on signs of an AI bubble, click here.—PK

CFOs and CEOs agree: Growth is the top priority this year and next, according to a new Gartner survey.

The consulting firm found that growth was the most common business priority for chief executives and finance leaders. Nearly two-thirds of CEOs (62%) and CFOs (65%) cited it among their top three priorities for 2024 through 2025. In fact, growth blew every other response out of the water. Rounding out the top three major priorities among respondents were technology (32% for CEOs, 37% for CFOs) and workforce (26%, 33%).

CFOs prioritized growth at a similar rate in the 2023 survey. However, growth increased 38% YoY as a priority among CEOs.

Executives’ priorities deviated a bit in cost management. More than a fifth of CFOs cited it in their top three priorities (up 33% YoY) whereas only 15% of CEOs did the same (up 6%). In a news release, Gartner leaders noted the divergence may come from CEOs giving “longer leeway” on investment returns than CFOs.

“To address these differences while keeping organizational growth a priority, CFOs should align with their CEO regarding digital investments, risk appetite and cost cuts that support growth,” Alexander Bant, chief of research in Gartner’s finance practice, said in the release. “CFOs should discuss the drivers behind their CEO’s flexibility on investment time horizons. For many companies, this likely relates to the longer timelines that transformational investments in technology require to deliver returns.”

For more, click here.—AZ