Page 29 - ASSET MANAGER 10 (EN)

ASSET MANAGER • NO. 10/2019 ZEB • 29
'DECLINING CAPITALISATION BY 2022 AND DECLINING PROFITABILITY FOR BANKS.'
• Growth through mergers in Europe, as in the past, is no guarantee for increasing profitability, since many non-harmonised jurisdictions represent a significant threshold, requiring some proprietary solutions for each country that at least partially offset the econo- mies of scale. Therefore, zeb's study authors call for further harmonisation of regulatory areas going be- yond regulatory requirements for banks to reduce this threshold for necessary European consolidation.
• Product specialisation can fundamentally increase profitability, but for most universal banks in Europe, this is an unimaginable way of achieve more sustain- able profitability.
• Banking as a service is no way to increase profitability for most banks due to the lack of DNA for this type
of business model, however, third-party banking as a service can significantly lower the cost to banks.
• Building ecosystems and breaking into the platform economy can be a promising development for many European banks if they are really driving customers forward and turning banks into agile customer-centric companies. From the perspective of the study's au- thors, this option offers the greatest leverage for coex- isting with fintechs and competing with non-banks and near-banks, which are increasingly becoming more of a competition for banks.
Detailed information on the current European Banking Study 2018 can be found at: https://www.zeb.eu/europeanbankingstudy