A German bank CEO sees gloomy times ahead; a "Facebook Bank" would attract many customers; and will New York benefit more from Brexit than Paris?
Traditional financial services firms must brace themselves for a sea change as the percentage of millennials among the world's population increases — some 40% of them would consider banking with Google or Amazon. That's according to a survey by Accenture, which questioned almost 33,000 people across 18 countries and found that 36% of Generation Y respondents would also be willing to purchase insurance products from internet giants such as the search engine and the online retailer, as well as Apple and Facebook. "Consumer behaviors and expectations are shifting in ways that will challenge financial services providers to rethink how they service their customers," Accenture says in its 2017 Global Distribution & Marketing Consumer Study: Financial Services Report. In Europe, Italian millennials are most likely to bank with an online service provider, with 52% of them saying they would consider it, while those in the U.K. and Spain were joint second with 45% each.
Meanwhile, banks in Germany face an additional threat, with foreign lenders steadily increasing their market share while domestic institutions spend their time complaining about the difficulties they face due to low interest rates and increasing regulation, Handelsblatt says. HSBC Holdings Plc, BNP Paribas SA and ING Groep NV are among the banks that have been growing their German business in recent years, with foreign lenders increasing their market share to 10.8% from 9.6% since 2013 — a figure that does not recognize that some "domestic" banks, such as UniCredit Bank AG, are, in fact, owned by foreign institutions. These are even more conspicuous in Germany's investment banking sector, with Bank of America Merrill Lynch taking the top spot in the ranking of M&A advisers last year, ahead of Deutsche Bank AG. Like rival Commerzbank AG, Deutsche is facing a large number of problems, which means that foreign competitors can step in and increase their market share, Handelsblatt says.
Bayerische Landesbank CEO Johannes-Jörg Riegler paints an even bleaker picture for German lenders in an interview with Süddeutsche Zeitung, saying their importance has diminished as the European banking sector as a whole faces difficult times, according to an n-tv.de report. Riegler argues that regulations that make sense on an individual basis create difficulties for banks when they are combined. "If we continue like this, a third of Europe's banks will disappear," he claims, adding that European lenders "will definitely not be among the world's strongest in the next 10 years," as the U.S. and China place greater emphasis on strengthening their banks.
With Brexit decisions coming into focus, the U.K.'s Guardian profiles a European city that stands to benefit from the potential fallout for London's financial services industry. Paris says it has received "enormous interest" from global banks that intend to move at least some of their operations to the French capital. The arrival of affluent financial services workers would create "a golden opportunity" for all sorts of industries in France, from private schools to luxury goods, The Guardian says. "Brexit is profoundly regrettable, but we cannot be passive or naive," Valérie Pécresse, president of the Île-de-France region, tells the newspaper. However, separately it argues that New York, being the only city in the world with a financial services infrastructure to rival London's, might actually benefit more from Brexit than any European contender — provided Donald Trump's presidency does not damage the U.S. more than leaving the EU harms the U.K.