The credit crisis has changed everything and banks have never been more unsure of their destiny than now, says software giant SAP.
In the wake of economic and demographic shifts, 82pc of European bankers feel that external factors such as the credit crisis will increasingly determine the future of their industry, more so than internal changes they can initiate.
On behalf of SAP, research firm Novametrie polled leading banking officials, economists and academics on the future of banking over the next 10 years in light of the current environment.
“There is not much that we can do about it,” one respondent claimed. “[The crisis] will limit credit activity, limit growth and limit customer relationships.”
The survey found that half of all bank executives believe that the credit crisis is part of a long-term transformation of the industry.
Some 70pc of respondents identify growing customer sophistication, ongoing change in the financial markets, globalisation and competitive pressure as external catalysts for change in the industry.
Information technology (IT) utilisation was cited by 19pc as a success factor, even though many current banks run outdated, expensive and inflexible IT infrastructures.
The limited emphasis given to business intelligence investments indicates that banks are not fully using the technology available to them to enhance customer care and turn these catalysts into business opportunities.
“The overall impression from this survey is that banks are not creating their own destinies,” said one of the industry observers polled, Arnoud De Meyer, director of the Judge Business School at Cambridge University.
“They see themselves as victims of the crisis, and are willing to let the current state of the industry determine where they go from here, not where they envision themselves to be 10 to 20 years from now. The future of this industry will remain scattered if they allow themselves to be blown like leaves in the prevailing winds.”
Current investments by banks, the survey found, tend to be short-sighted.
They are aimed at retaining market share in the present, with a limited long-term structure in place to grow their business. For example, banking respondents understand the rise of a new generation of customers that are not attached to any traditional banking model.
One is a youthful niche of customers who are using new channels such as the internet and mobile technology as their primary banking conduits. Additional customers segments are being carved out through changing demographic shifts among the elderly and immigrants.
However, according to the outside experts surveyed, banks are not laying enough of a foundation to capture these emerging niches.
Several observers noted that banks are more focused on the internal needs of their businesses rather than developing an understanding of customers that would spur more variety and flexibility in standard services and IT infrastructure.
“Banks talk about being customer-centric, but they are not,” one observer noted.
By John Kennedy