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European Retail Banks - An Endangered Species?

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European Retail Banks - An Endangered Species?

Survival Strategies For The Future


15 min read
10 take-aways
Audio & text

What's inside?

Forget the traditions of European retail banks. The consumer lion is starting to roar and they must change to feed it.

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Editorial Rating



  • Innovative


In most industries, those advocating change initiatives (usually consultants) only need to run around warning that the sky is falling in order to be heard - and indeed in many industries the sky does look a bit shaky. Apparently, that claxon-sounding process is a bit more complicated in the banking industry, where no one wants to suggest that something might be, um, unsound. Kern and Dombret have adapted the phrase "a less rosy future" to describe their concerns regarding the issues that European retail banks face today. Make no mistake, however, despite their delicate and responsible phrasing, Kern and Dombret see an immediate need for banks to undergo a serious transformation. The traditional market activities of banks - the value chain - must be broken up into more specialized parts, and banks must find a market segment they can serve, and then adapt to serve it. While the topic is a bit specialized, strongly recommends this book to anyone with an interest in the future of banking.


Welcome to the Un-Bank

When is a bank not a bank? These days, the answer is: when it’s a "non-bank" or a "near bank." Banking hybrids are taking the "ka-ching!" out of some retail banks’ balance sheets, raising the question as to whether Europe’s banks can adapt quickly enough to survive. The retail banking market in Europe is marked by ever-increasing competition, and directors must decide how to adapt to the pace of change and, indeed, decide which changes to make.

Today, retail banks face a future that looks less than rosy. Several trends account for this and, while no one trend is decisively negative or significant, together the trends pose a significant challenge. The biggest factor, not surprising given the general trends in business, is greater competition. Technology is increasing the strength and reach of existing players, now enabling international players to enter local markets. Thus, more players are competing for the available business. Also, the industry has seen the rise of specialized financial competitors who focus fully on serving the needs of their chosen market segment.

Customers have changed, too. Today’s banking customer is increasingly ...

About the Authors

Andreas R. Dombret is managing director of the Financial Institutions Group of Rothschild and co-head of Rothschild Germany. Dombret, who advises European financial services companies, is the former managing director at JPMorgan, in charge of German financial institutions. Dr. Holger J. Kern is the vice president of Monitor Group of Munich, a distribution strategies, segmentation and branding consultancy with 29 offices worldwide. Previously, Kern was responsible for the Financial Services Practice Group at Roland Berger.

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