What will become of retail banking by the end of this decade? How will a new breed of retail bank customer, innovative payments technology and an unprecedented amount of new regulation shape the industry?
These were the essential questions posed by Chris De Noose, ESBG Managing Director, in his opening speech. They were also the theme of a day that began with an intriguing analysis by Georges Ugeux, CEO of Galileo Global Advisors of the death of a certain business model, that of the universal bank, and the strengths of an existing business model, that of the retail bank. Peter Morgan, Member of the European Economic and Social Committee, stressed the difficulty for large banks to meet their clients’ expectations and how new technologies might help banks bridge the gap with their customers.
The day’s first panel discussion, moderated by Philippe Pelle of the European Commission, addressed how banks can deliver good advice to their clients. Henning Bergmann of the German Savings Banks Association, Joseph Delhaye of the Luxembourg savings bank Banque et Caisse d’Epargne de l’Etat (BCEE), Camden Fine of the Independent Community Bankers of America, and Guillaume Prache of Euroinvestors engaged in a lively debate that emphasised the importance of trust, of discerning between information and recommendation, of meeting both regulatory requirements and customer needs, and of offering affordable advice to all customers.
Following a fascinating presentation by Tunz.com’s Jan Van Wijnendaele on E-money as a service and the emergence of mobile payment tools, the day’s second panel focused on payment solutions for consumers and SMEs. Moderated by Norbert Bielefeld, the panel discussed how payments are not a mere utility for consumers but rather a crucial service, and how technology can drive innovation without reducing security.
Opening the afternoon session, Gao Ming, Chair of Industrial and Commercial Bank Chine (Europe), described ICBC, the world’s largest listed bank in terms of market capitalisation, net profit and customer deposits, and its strong presence in Europe, which it considers one of the most attractive destinations for investment. Addressing Basel III, she said that even though the details are yet to be hammered out, the new regulatory framework will improve the quality and transparency of bank capital, and conforming to it will be a major challenge for international banks, since it will require them to radically upgrade their capacity for risk control.
In his keynote speech introducing the day’s third and last panel dedicated to “CRD4: steadying hand or stranglehold?”, Othmar Karas, Member of the European Parliament, stressed the need for a flexible approach to Basel III and CRD4, given that member states are at different levels of maturity. Adequate transition periods are therefore crucial, as is a clear definition of capital. The panel, moderated by Andrew Hilton of the Centre for the Study of Financial Innovation, expressed the fear that CRD4 would make credit financing more expensive, and insisted that national specificities be taken into account.
In his closing speech, Heinrich Haasis, President of the German Savings Banks Association, promoted the idea of local banking: banking by institutions that are close to the people and certainly not “too big to fail”. However, since the crisis, problem banks have only become bigger and retail banking activities have not yet been separated from riskier investment banking operations.