Disruptive Innovation Is Challenging The Old European Banking Model
These days, ensuring your old fashioned bank is well capitalized enough to deal with more realistic, but still moderate stress tests is a major priority. But just when you think you have put out the fire, the entire structure of the banking model becomes disrupted and structurally unsound.
Lower barriers to entry in terms of financing, securing banking licenses, cheaper to source banking software and cheap human resources means it’s never been easier to cherry pick the most lucrative products banks are offering to customers today. The net result? It leaves the unprofitable products to the old dogs to chew on.
And therein lies the problem. How the existing banking industry responds to these disruptive threats will decide their fate. Perhaps they will seek to aggressively promote the concept of a cashless society (yet again), so that the public will once more feel tied into using their services. Deloitte UK produced a nice SlideShare (see below) to illustrate the pressures the traditional banking model now is under.
What next for the establishment banks of Europe?
Marketing REDS 
Ronan,
Cashless society is top of the Banks (and Governments) list of priorities…they say it the only way to get rid of the “black” economy is to get everyone dealing via electronic transactions.
Mind you the banks seem to discourage customers from actually entering a bank premises these days…..deal with the machine….not the bank teller.
Glad to see you are still blogging….all the other sites seem to have quietly gone away…
Deaglan
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Hi Deaglan,
The fun really begins after the stress tests. If any banks fall short on the moderate EU bank capital adequacy ratio (CAR) target rules, they will use the crisis to lobby for further tighter controls over the flow of money. All “in the national interest” 😉
Now that Junker is in place, the federalists can reignite their European reich agenda.
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Although UK not in Euro, they could make things somewhat difficult for Junker et al….not all euro countries were fully in his favour.
Somehow I think the banks will “just scrape through” the stress tests….”in the national interest”
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