As is well known, the German banks are struggling.
Your most important source of income, net interest income, has been melting for years.
According to data from the Bundesbank, the return on equity was recently around 2 percent - no entrepreneur would take a banking risk with such a (low) profit prospect.
"The banks are destroying capital," says Jürgen Moormann.
The professor of bank and process management at the Frankfurt School advises banks not only to cut their costs, as Deutsche Bank and Commerzbank are doing with extensive downsizing and branch closings.
“Increasing efficiency quickly takes you to the limit,” says Moormann.
It is also important to renew the business model in order to increase the earnings potential.
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In Moormann's opinion, banks need to be more aware of the fact that easily accessible structures (“platforms”) emerge on the Internet that are often driven by data and driven by the interaction between providers and customers. In the future, a bank will be less in competition with another bank than with large platforms such as Amazon or Facebook. These platforms create value by linking different actors: a legal owner (“orchestrator”) and an operator of the IT infrastructure bring consumers (users) and providers together. “Bank executives have to ask themselves: What role can our bank play in such a digital ecosystem?” Says Moormann. One possibility is to offer your own service on platforms such as Amazon and Google. The professor names a survey by the consulting company PWC,95 percent of the banks surveyed were in favor of building their own ecosystems, but half of them wanted to spend less than 500,000 euros a year on it. "Ridiculous", said Moormann this amount in an interview with journalists on Thursday, after all, it would hardly pay more than one employee.
As a contrast, Moormann refers to the Chinese insurer Ping An, which employs 20,000 IT developers and has set up ecosystems not only for financial services, but also for car rentals, online doctor visits (250 million registered users), home purchases and places in old people's homes. “Banks have to become IT companies,” the bank professor concludes. They would have to analyze their data more precisely, develop software themselves and make their IT infrastructure connectable so that other platform participants could dock onto it via open interfaces (API). Outdated IT, which unnecessarily isolates bank data beyond the necessary and important data security requirements, is considered to be the greatest obstacle. Moormann sees opportunities for German banks most likely in regional ecosystems,He holds the data centers of the savings banks (Finanz Informatik) and the VR banks (Fiducia & GAD) obliged to create the necessary IT infrastructure.
VR-Bank Würzburg is also smart
The VR-Bank Würzburg is one of the few credit institutions that are considered innovative in the development of new business areas in the network.
The cooperative bank with total assets of 2.3 billion euros, 300 employees and 80,000 customers set out as early as 2016 to do something against falling interest income in the seven-digit range.
In the meantime, she is making up a third of this with digital deals, said deputy chairman of the board Joachim Erhard in an interview with the FAZ
One of the new business areas is an internet portal called VR-Crowd, operated in cooperation with the Fintech CrowdDesk, on which VR-Bank Würzburg offers property projects from developers that it has reviewed. In return for a fixed interest rate commitment, bank customers can provide money between 250 and 250,000 euros. Because one relies on the participation of many private customers, this is called "crowd financing". Ten projects have already been financed in this way in the past year and a half, and twenty other banks are now offering real estate projects on the portal. You can be paid for the brokerage of capital and can then stand by the property developer with loan financing.
In addition, VR-Bank Würzburg wants to become a digital “network node” by taking on all kinds of services from its private customers for a fee, such as the digitization of private documents. Or find craftsmen in the region. Or brings industrial customers together with (inexpensive) energy providers. All of these more or less bank-related ideas initially require strategic imagination, and implementation requires an understanding of processes.