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Andreas R. Dombret

European Retail Banks - An Endangered Species (Methods and Principles in Medicinal Chemistry) 1st Edition

by Andreas R. Dombret (Author), Holger J. Kern (Author)

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In today's retail banking industry in Europe, the current situation is unsatisfactory: new technology standards have lowered the entry barriers and increased the reach of the various players within the industry. Market players face increased competition, margin pressure and low or even negative profitability. Banks face structural challenges (overbanked and a fragmented market, dominated by non-quoted banking institutions) as well as weak levels of customer loyalty putting pressure on banks to find winning strategies.

Looking at the successes of "near- and non-bank" entrants, we start with the hypothesis that a superior sales capability lies at the root of increasing success and market penetration. Consequently, both production and infrastructure might become commodities, which the successful sales-focused players may want to outsource in the future. The consequence will be an increased technology-enabled specialization within the industry.

The book analyzes the retail banking segment along its value chain and searches for success factors in each step. Additionally, we searches for possible new paradigms shaping the industry beyond the E-revolution. Examining benchmarks and best practices both within and outside the banking industry, we will challenge the traditional ways of doing business in each step of the value chain.

Confronted with a pan European endgame situation and facing the danger of getting stuck in the middle between sales-oriented and technology-focused market players, today's banks will have to decide on their future business model, position themselves accordingly, and proactively develop respective core capabilities. New strategies incorporate not only internal changes, but also moves for external transformation. Alliances or M&A transactions offer the opportunity to successfully in- and/or outsource respective steps of the value chain and develop towards a focused and competitive market player . Hence, our report will discuss successful business models, transformation strategies, key success factors, transaction structures, and respective case studies.

Only by positioning themselves carefully for the European retail banking endgame, retail banks will be able to improve their profitability and obtain a sustainable competitive advantage to survive in the future.

Editorial Reviews

From the Back Cover

Today’s retail banks are facing a less rosy future than they might be expecting. Market players are challenged by increased competition, margin pressure and low to even negative profitability.
In order to cope with these challenges, retail banks will have to stop trying to be all things to all people. Excellence can only be achieved through focus – on a certain customer group, on a specific product, on a certain process, or on a particular value proposition. Successful future business models within the value chain can range from “Aldi-Banks” and “Delicatessen Banks” to “IT-Specialists or Rocket Scientists”. For each player, the transformation process will have to be a very conscious and active one. If companies avoid active decision making and try to let the market decide for them, they will find themselves falling through the cracks, doomed for failure.
The book shows how banks should position themselves for the European retail banking endgame, how to improve their profitability and how to obtain a sustainable competitive advantage to survive in the future.

About the Author

Dr. Holger J. Kern, Vice President of Monitor Group, is responsible for the Financial Institutions Group in Europe. His consulting work is primarily focussed on distribution strategies, segmentation and branding. Before joining Monitor, he was responsible for the Financial Services Practice Group at Roland Berger.

Andreas R. Dombret acts as Co-Head of Rothschild Germany. He specializes in M&A-transactions focusing on financial institutions. The Rothschild group is a global investment bank covering a large variety of sectors.

Product details

Publisher ‏ : ‎ Wiley-VCH; 1st edition (October 20, 2003)
Language ‏ : ‎ English
Hardcover ‏ : ‎ 138 pages
ISBN-10 ‏ : ‎ 3527500642
ISBN-13 ‏ : ‎ 978-3527500642
Item Weight ‏ : ‎ 14.6 ounces
Dimensions ‏ : ‎ 6.93 x 0.63 x 9.7 inches

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Insightful!

Reviewed in the United States on May 20, 2004

In most industries, those advocating change initiatives (usually consultants) only need to run around warning that the sky is falling in order to be heard - and indeed in many industries the sky does look a bit shaky. Apparently, that claxon-sounding process is a bit more complicated in the banking industry, where no one wants to suggest that something might be, um, unsound. Kern and Dombret have adapted the phrase "a less rosy future" to describe their concerns regarding the issues that European retail banks face today. Make no mistake, however, despite their delicate and responsible phrasing, Kern and Dombret see an immediate need for banks to undergo a serious transformation. The traditional market activities of banks - the value chain - must be broken up into more specialized parts, and banks must find a market segment they can serve, and then adapt to serve it. While the topic is a bit specialized, we strongly recommend this book to anyone with an interest in the future of banking.