The future shape of banking in Europe
How disruptive forces will drive the evolution of a new banking ecosystem
The banking industry in Europe is in need of a major shake-up. A new array of challengers, including fintech start-ups, non-bank finance firms, technology giants and high-street retailers are soliciting bank customers with new propositions and ‘cherry-picking’ other parts of the banking value chain.
In light of the above "The Future shape of banking in Europe" expands on our previous paper "The future shape of Banking – Time for the reformation of banking and banks", setting out three possible scenarios for the future of banking in Europe:
- Established banks adapt and consolidate, but not before challengers have taken a permanent, sizeable (20%) share of the market
- A tipping point is reached and established banks either fade away or are reduced to playing a utility role; this trend could be accelerated by a new banking crisis triggered by falling investment in incumbents
- Incumbents and challengers find a symbiotic, collaborative relationship, the industry addresses itself collectively to customer service innovation and a new banking ecosystem emerges.
The report argues that an evolved banking ecosystem, in Europe and beyond, is both the most likely and most desirable outcome (a form of scenario 3) and sets out key steps that will lead banking, and banks to this path.
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