In the past years, has been asked time and again to fundamentally question whether or not Bigtechs, Fintechs, or other innovative companies can assume by the way the banks Job. Now it shows: no, you can’t – the banks are needed.
As the “financial backbone” to take on banks and savings banks, with the credit supply of the real economy and private households, crucial tasks. And lending is growing: In April, as many loans were granted within the Eurosystem in business since eleven years.
in the Meantime, about a third of the branches of
is closed at the beginning of the Corona-crisis was all about, to get the operational side of the banking business continue to provide them with cash, to fill ATMs, even in the event of branch closures by phone and online to. All of this is successful. And that was a remarkable performance, after all, was temporarily closed about a third of the branches.
your own market and liquidity risks banks were largely in the grip. And also for possible loan losses, which occur only with a time delay, should be prepared by the Institute according to the current data location. Provided always, the Corona pandemic is exacerbated not dramatically. The Person
Bank supervisors, Joachim Wuermeling, member of the management Board of the Deutsche Bundesbank is responsible for the areas of banking supervision, information technology, and risk Controlling.
What comes to the banks benefit, is that they have strengthened their capital buffers in recent years, in accordance with the Bank’s supervision. This means that Based on the entire German financial system itself credit losses in the order of magnitude of 100 billion Euro would be simulated in scenarios for very adverse conditions, only about half of the buffer consume the credit institutions since the financial crisis have built up.
the banking sector has good prerequisites for the future
The banking sector has scored in the current crisis. These are good prerequisites for the future – if the banks can cope with old problems.
even before the crisis, the question was: How banks can be in times of low interest rates and still be profitable? The business models of credit institutions also need to work on the longer term, with low interest rates good. But the look into the balance sheets of 2019 shows that Not every Institute has a solid income. Some need to improve and also core components of your business model to the test. Consolidation will not remain in addition, a continuous burner, which does not necessarily mean to close branches and to merge institutions. The individual elements of the value chain can be centralized and thus more efficient.
efficiency can be achieved in many cases through the use of digital solutions to increase. In order for this to succeed, it must be used to the ambitious technology, which goes beyond video conferencing and better online banking and beyond: Artificial intelligence, Tokenization, Cloud-based solutions. Since the “digital music”, that’s where the Innovation lies dormant. The Corona-crisis alone is no automatic “digitizing Boost” – it requires self-initiative and new ideas – both now and after the crisis.
sustainability must remain on the Agenda of the banks
The banking supervision is to accompany these innovations in a constructive way. So, it supports credit institutions, for example, by outsourcing to Cloud service providers, joint audits of the institutions in the so-called “Pooled Audits” are possible. If a German Bank uses Cloud services from the Silicon Valley, no need to go any Institute there and the risk management view, but this can be implemented in Networks of experienced auditors number of banks, and thus save costs.
And also the issue of sustainability must remain on the Agenda of the banks. Even if COVID-19 has slowed the momentum of the climate debate, first of all, it can be faster to change at any time – even than expected. For banks, there are opportunities in the financing of “climate-friendly” innovations. It may, however, incur risks, for example through loans to non-sustainable sectors of the economy. Therefore, banks and savings banks, sustainability-related risks should include, as an essential aspect in your risk assessment.
Want to be a Bank for the future, it will have to fight at multiple fronts at the same time. It is not enough to have only the crises-to-day business at a glance. Old challenges around profitability and consolidation will remain in place, known as digitalization and sustainability, and new topics will be added by a hopefully dynamic economic recovery after the pandemic. Banks to help shape these issues for the future active, is crucial. Then you have the Chance to strengthen its role as the financial backbone of companies and private households even. This Chance you should not miss. Germany – Your chances
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