Happy New Year!
This post marks the beginning of my career as an Accenture blogger. I’m looking forward to communicating with you in 2018 and beyond and to commenting on developments in the banking industry in Europe. I joined Accenture late last year as head of the banking practice in Europe. I am an industry veteran with extensive experience both as a consultant and as a banker.
This is an enormously exciting time to be working in the banking industry, particularly in Europe. There is massive change taking place on many fronts:
- New entrants from inside and outside the industry are presenting customers with new approaches to traditional banking services.
- New technologies are enabling offerings such as instant payments and community lending, providing benefits both for the providers and for the consumers of financial services.
- Regulators are reshaping the industry, opening doors to competitors from outside the industry, which is pushing banks to form alliances with other banks and with non-traditional partners such as FinTech firms.
As Accenture has noted, most banks in Europe have been vertically integrated, covering all aspects of the value chain from origination to servicing. The universal bank concept is well-established, with the retail sector more stable in recent years than the commercial and investment banking side. Within Europe, there has been more regulation, but regulatory barriers to entry have enabled intra-industry competition. While regulation has deterred cross-industry threats from retailers, telecoms and consumer tech giants, it has also fostered a wide variety of institutions, including private, mutual and cooperative banks.
This is all about to change. The combination of competitive disruption and regulatory actions like PSD2 in Europe and the Open Banking initiative in the UK is forcing banks to open up faster than other industries while maintaining the security that is part of their DNA. Before too long, bank customers will be able to share access to their financial data with non-bank third parties, and third parties will be able to integrate their services with those of a bank to create a better banking experience while keeping client data secure.
European banks are facing many other challenges, including continuing low levels of profitability and the need to formulate and execute digital strategies. Digital strategies, in turn, call for a new look at how people are selected, trained and motivated as banks shift from product-driven to customer- and people-driven organizations.
I will be writing about these and other topics in the months to come, particularly as they pertain to Accenture’s own vision and its view of banking strategy, technology and operations. I welcome your comments and questions, and look forward to a lively exchange of ideas.