At the beginning of a bank report, we pointed out to the stable revenue pool of German banks.
Let us dampen the excitement about these otherwise good news a bit: Continued stable revenues
also mean that growth opportunities of banks in Germany are limited; additionally, higher risk
costs can potentially deplete the aforementioned buffers quickly.
To survive in either scenario, banks will need to (further) develop two main competencies: their
cultural flexibility and their ability to innovate. If they accomplish this objective, they can take
advantage of solid starting points (customer access, risk and cost awareness, healthy economy)
to establish sustainable and successful business models.
Different from conventional “cost cutting initiatives” or “growth strategies”, for which extensive
experience exists, these novel topics lie not within the traditional scope of banking organisations’
fields of competence. This will make the persuasiveness and authenticity of senior management
a decisive factor to ensure success of the transformation.
As such, the particular skill sets and strengths of their senior management will become an even
more important differentiating factor for banks than before. Ultimately, this will determine which
banks will survive in the long run.