How Will European Banks Face All the Challenges of Global Competition and Digitalization
As the banking sector becomes progressively more global the challenges facing banks have become more complex. Not only do European banks have to compete globally but they also have to develop a strategy to close the existing gap between where they are and where they want to be in the future.
Digital banking and the ever-changing world of banking means that European banks are faced with countless regulations as well as the challenging profitability gap with American banks. For European banks to survive the digital metamorphoses of the financial sector they need to reach a new generation of clients with innovative technical solutions. Banks are moving beyond proof-of-concept and towards commercial distributed ledger technology with over 75% of financial service providers aiming to incorporate blockchain in their system by 2020.
European banks must set their sights on the future, choose a playing field and strategize to win depending on their capabilities in the digital sector and the products and market that have the most growth opportunities. Technology and the digital worlds can give bankers skills and tools so that he can serve his clients in ways he never could in the past. This kind of banker, who uses technology to support his clients is termed an “augmented banker.”
The Augmented Banker for a New Generation
With digitalization of banking comes the need for a new kind of banking professional, an augmented version of the traditional banker, one that will have the latest skills and tools at his fingertips. There is still a long way to go between present European banking and a fully-fledged digital banking world with staff that know how to handle themselves in this new banking terrain.
There will be a need for both “hard” digital transformations like technologies and start-ups as well as “soft” digital transformation such as an approach that works from the bottom-up. In all likelihood the new generation, augmented banker will first appear in Compliance and Investment.
How European Banks can Meet the Challenge of Global and Digital Banking
- European banks need to gain a wider client base by offering alternative financing and digital banking options.
- As the market develops European banks can target large corporations.
- Traditional European banks must analyses the market and choose the optimum playing field focusing on areas where they have or can build a competitive advantage.
- European banks need to be open to new ideas, innovative technology and new partnerships.
- Incorporate advanced technology such as AI, DLT and blockchain solutions.
- Ultimately the best option for European banks facing the ever growing globalization of banking and digitalization is to combine alternative financing solutions with traditional banking.