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German top 5 banks: balance sheet total 2018 in EUR million Source: https://de.statista.com/statistik/daten/studie/157580/umfrage/ bilanzsumme-der-groessten-banken-in-deutschland/
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Banks have not come to rest since the 2008 banking crisis and have been struggling for their future ever since. In addition to serious market distortions, there are increasingly digital challenges and investments in the banks' platforms to remain competitive and continue to meet customer requirements. Other industries are showing the banks how to d...
Citations
... Beim Omni-Channel-Ansatz werden sämtliche Vertriebskanäle ganzheitlich miteinander verzahnt, um Bankkund:innen über alle Kanäle hinweg erreichen zu können. Ein Omni-Channel-Management wird Auswirkungen auf den Bankvertrieb, die Mitarbeitenden, die Prozesse, die Kundenzufriedenheit und die Kundenloyalität haben (Menrad, 2020). Als konkretes Ergebnis des Omni-Channel-Managements werden bei Sparkassen bereits heute Social-Media-Aktivitäten, mit der Absicht ihre Kundschaft zu erreichen, beobachtet. ...
Sparkassen in Deutschland stehen aufgrund der digitalen Transformation vielleicht vor ihrer größten Herausforderung. Technologischer Fortschritt, Kostensenkungsmaßnahmen, Aufsicht, Regulierung, Niedrigzinsphasen und der demographische Wandel beeinflussen die Wirtschaftlichkeit von Sparkassen maßgeblich. Die 359 Kreditinstitute der Sparkassenfinanzgruppe (Deutscher Sparkassen- und Giroverband, 2023) sind entsprechend gezwungen, sich mit der Digitalisierung und Strategien zur Kundenzentrierung auseinanderzusetzen. Als konkretes Ergebnis einer solchen Auseinandersetzung können bereits heute Social-Media-Aktivitäten, mit der Absicht ihre Kundschaft zu erreichen, bei Sparkassen beobachtet werden. Das Ziel der vorliegenden Forschung ist es, den Umfang, die Effektivität und den Nutzen dieser Aktivitäten wissenschaftlich zu untersuchen. Dabei sollen folgende Forschungsfragen beantwortet werden: 1) Wie nutzen Sparkassen in Deutschland Facebook als Unternehmensauftritt? 2) Welche Schlüsse in Bezug auf die Institutsgröße lassen konkrete Nutzungskennzahlen (wie z. B. Anzahl Fans) in diesem Zusammenhang zu? 3) Wie sollten Sparkassen Facebook künftig sinnvoll nutzen? Mittels Literaturrecherche und quantitativer Analyse von konkreten Nutzungskennzahlen der einzelnen Sparkassen werden die Forschungsfragen beantwortet. Der Hauptbeitrag und die Originalität dieser Forschung sind Ergebnisse, welche den Einsatz von Facebook aus Sparkassensicht auf den Prüfstand stellen. Die Untersuchung schließt nicht nur eine bestehende Lücke in der akademischen Diskussion zu Social Media im deutschen Bankwesen, sondern trägt auch zu praktischem Wissen aus Unternehmenssicht bei.
... Following Barnes' Strategic Model of Mobile Banking (Scornavacca and Hoehle, 2007), the bank may adopt first internet banking considering high PC penetration or adopt first the mobile banking considering high mobile devices penetration, prior to the channel extension. According to the number of channels, the bank may opt to utilize a channel, multi-channel approach, or omnichannel approach (Menrad, 2020). The rise of digital banking has shifted the bank to adopt the omnichannel (Hamouda, 2019) since it has been suggested as ideal for the banking industry (Komulainen and Makkonen, 2018). ...
The digital banking services which consist of internet banking and mobile banking have occupied an important role in the financial sector. Despite the importance of digital banking, Islamic banks in Indonesia have encountered issues with the adoption of digital banking such as budget constraints as well as sizable investment. Therefore, it is important to examine how to prioritize the selection of digital banking services in Islamic banking. This study aims to propose a model for prioritizing the selection of digital banking services in Islamic banking by applying document research through analyze way the paper or journals and other published sources concerning with the digital banking and product development in Islamic banking. While most of the studies conducted in the conventional banking, in this study the proposed model is built to address the Islamic banking. The proposed model comprisessix criteria and six alternatives of services that should be considered in the selection of digital banking services from Islamic banks perspective. The proposed model involves general criteria that presence in the general banking context (conventional banking or Islamic banking) and specification criteria which only presence in the Islamic banking namely Sharia (Al-Syari’ah). Therefore, the proposed model has characterized the model utilized for the Islamic Bank in prioritizing the services in digital banking.
... An empirical study on regional and international banks operating in the United Arab Emirates reports that banks own a fintech or develop partnerships with them (Sibanda et al., 2020). Menrad (2020) observes that (German) banks no longer see fintech firms as a disruptive competitor and that banks integrate fintechs as sales partners. Drasch et al. (2018) found that the most common form of cooperation (in a German database) is through alliances where banks access innovations but avoid the costs of integration. ...
This paper addresses the question of how financial technology transitions unfold. Innovations in financial business models driven by technology do not only involve changes in financial services delivering, but also changes in market, regulation, industrial networks, dominant players, and culture. The work adopts a multi-level perspective on financial technology transitions. Based on a literature review, the socio-technical landscape, regime, and niche levels are elaborated. The paper contributes with a new framework on financial technology transitions that may be used as an analytical tool to elaborate on future transformations in the sector and to customize for national-level studies.
... According to Menrad (2020), the banking process will change significantly. Unfortunately, banks are lagging other industries. ...
... The introduction of an omni-channel concept in connection with digitalization activities will have a decisive influence on the banking business in Germany. Omni-channel management is seen as having an impact on bank sales, staff, processes, the customer side, customer satisfaction and loyalty (Menrad, 2020). ...
Due to increasing digitalization, the German banking sector is undergoing a massive period of change. This threatening challenge is massively influenced by demographic change, supervision and regulation, the low-interest phase and technological progress. In the last twenty years, mergers of regional banks, staff reduction measures and the closure of their traditional bank branches have been the order of the day. Banks in Germany are therefore forced to deal with the introduction of omni-channel concepts. The aim of the research is to make a statement on the extent to which the two distribution channels “bank advisor” and “traditional bank branch” will still play an active role for regional banks in Germany in the future. The results of standardized interviews with bank experts (N = 43) in Germany form the core of this study. This paper summarizes the findings of the quantitative research descriptively. Furthermore, the article critically examines the academic discussion on the digital transformation of banks in Germany, especially savings and cooperative banks. This article is structured as follows: Introduction, Literature Review, Methodology, Results and Discussion, Conclusions, Limits and Directions for further Research. The results of this article can be useful for researchers and bank practitioners to identify and utilize the strategic change potential under omni-channel aspects due to the digital transformation.
... According to his analyses, German bank customers are developing hybrid channel behaviour and demand situational communication across all channels. German banks are forced to transform their traditional approach management into omnichannel management (Menrad, 2020). ...
Due to digitalization, the banking sector has been undergoing massive change in Germany for years. The causes are the rapid technological progress, regulation and supervision, the low-interest phase and demographic change. The future world of work will be characterised by digitalization and automation. These changes will have an impact on how bank customers demand, evaluate and ultimately purchase financial services. This paper examines the impact of digitalization on the entire German banking market and shifts the focus to big data analytics as a possible means of improving existing business areas with innovative approaches. The retail banking business is used as an example to show how Big Data Analytics is already being used by banks and what opportunities there are for further development. This quantitative research summarises the analysis of German banking groups using real key figures. The aim is to identify approaches to how banks can respond to the challenges of the market environment beyond cost-cutting measures. The relevance of the research's findings can be useful for academics looking at big data analytics and digital transformation in general in Germany's banking centre and looking for real examples from practice.
... Banks in the current status may have a good way of serving, but a lack of sufficient understanding of seamless customer experience will lead to losing market share to their competitors [5]. Although the multichannel approach is currently the most widely used communication method in the banking industry, Omnichannel will be the undisputed solution for the future of banking due to customer behavior changes, digital transformation, increasing competition, balancing costs and increasing profitability [6] [7]. To succeed in an Omnichannel environment, banks should adopt new strategies in areas such as pricing, designing the customer experience and building relationships with customers [8]. ...
... Studies in [5][6] [7], show that design and optimized analysis of the customer experience has a key role in Omnichannel strategy. In the future, the majority of customers will expect to use all channels seamlessly, and banks will require to manage their business priorities according to customer needs. ...
... The evolution of channel strategies has been introduced in [7] and compared in terms of their features and applications. In research [2], the effectiveness of different channels in Omnichannel banking has been investigated. ...
Over the past few years, the rapid growth of financial services and changes in customer requirements have laid the groundwork for digital channel expansion. Omnichannel is an approach that assists banks to collect customer information based on their activities in different channels and provides an integrated and unified customer experience. Currently, most banking services are developed without a sufficient understanding of customer experiences and activities, and each channel is considered separately. BIAN is a service-oriented enterprise architecture framework specified for the banking industry, the main element of which is service domains. Each service domain is a specific area of business, the combination of these service domains covers different banking business scenarios. This paper proposes a model that uses Omnichannel in the banking industry based on the BIAN framework. The proposed model use BIAN business domains to provide an integrated and optimal interaction between different banking channels in order to improve the customer experience, improve customer retention rates, upgrade the quality of banking services and profitability by analyzing customer behavior, marketing and forecasting needs. In order to explain the application of the proposed model and evaluate its executive validity, the business scenario of opening a current account is considered.
... Banks and savings banks are also lagging behind other sectors in this context. Omni-channel management in German bank distribution will change significantly and is without alternative (Menrad, 2020). ...
The German banking industry is facing major challenges due to digitalization. The digital transformation is significantly influenced by technological progress, tighter regulation and low-interest phases. The market entry of fintechs and changing customer behaviour is also a reality. To meet the challenge of the digitalization and to to reduce costs, savings banks are increasingly turning to mergers, staff cuts and branch closures. The purpose of this research is to investigate the impact of digitalization on German savings banks. Through an explorative literature review, scientific sources and real KPIs of savings banks in Germany were used. The impact of digitalization on savings banks in the period 1999 – 2018 was investigated using the study situation and the analysis of key business figures. The aim is to answer whether the cost-cutting actions of savings banks are justified from an economic point of view based on the KPIs operating result, cost-income ratio and return on equity. In recent years, it has become clear that German banks lack a clear strategy. The results may be of interest to researchers dealing with the digital transformation of savings banks in Germany.
... As our research showed, banks in Germany are already thinking intensively about the introduction of omni-channel concepts. An introduction is even of fundamental importance for the German banking system (Menrad, 2020). For customers, the branch will therefore continue to play an important role in the future, as some customers still consider personal advice to be important. ...
The banking market in Germany is facing big challenges due to digitalization. The digital transformation
is significantly influenced by technological progress and the low-interest phase. The article deals with the group of
cooperative banks, which consists of many individual cooperative credit institutions. Cooperative banks are credit
institutions whose objective, according to their statutes, is the economic promotion of their members through
joint business operations. The traditional classical business model is traditionally based on personal customer
contact. More mergers are to be expected in the banking sector in the coming years. The process of branch
closures and staff reductions is also inevitable. Although the role of branches is up for discussion, they are
increasingly falling victim to increased cost pressures. These changes have an impact on many aspects of how
bank customers demand, evaluate and ultimately purchase financial services. In recent years, it has become clear
that banks lack a clear strategy. The aim should be that the strategy does not focus exclusively on cost-cutting,
such as branch closures and staff reductions. The main purpose of this research is to investigate whether these
cost-cutting measures in cooperative banks are operationally justified in relation to the available operating profit,
cost-income ratio, and return on equity. The results of this article may be relevant for researchers dealing with
Digital Transformation in the banking sector in Germany.
... To analyse the positioning of banks for the future, Menrad (2020) wrote in his study about the evaluation of omni-channel management in banking. It found that banks are already thinking hard about introducing omni-channel concepts in banking. ...
... Banks are also lagging behind other industries in this context. Omni-channel management in German bank distribution will change significantly (Menrad, 2020). Existing omni-channel concepts of savings banks and cooperative banks could also be analysed in the context of further research using concrete key figures. ...
Due to the digital transformation, the banking sector in Germany is undergoing massive change. This structural change is massively influenced by technological progress, regulation and supervision, the low-interest phase and demographic change. The focus of this research is on the comparison of savings banks and cooperative banks in Germany, as there are many similarities between the two banking groups. Both belong to the so-called retail banks. The respective bank clients are very similar due to the regional principle, the structure in regional associations and in their clientele. The main purpose of this research is to investigate which of the two banking groups, savings banks or cooperative banks, is more operationally efficient under the same prevailing competitive pressure from the Digital Transformation. This paper summarises the analysis of both banking groups based on real ratios. The relevance of the findings on this scientific problem is that the comparison of savings banks and cooperative banks in Germany has not been addressed in the scientific literature so far. The aim of the research is to make a statement as to which banking group has performed better given the same external market factors. Furthermore, arguments and counter-arguments within the academic discussion on the topic of digitalization in the German banking market will be compiled. The results of the research can be useful for academics who deal with the digital transformation in the banking sector in Germany.
... After the financial and economic crises that erupted in 2007-2009, it was observed that the financial sector in Europe was still vulnerable and did not function reliably. After the 2008 banking crisis, banks have been struggling for their future (Menrad, 2020). Obviously, in the monetary union such as the Eurozone, problems caused by close links between public sector finance and the banking sector can easily transcend national borders and cause financial distress in all member states. ...
... Many insurers claim that the realization of the factor that something is insured leads, for example, to situations where policyholders with collision insurance drive recklessly or fire-insured homeowners smoke in bed (Van Wolferen et al., 2013, pp. [11][12][13][14][15][16][17][18][19][20][21][22]. ...
The creation of deposit insurance systems in world practice has become a tool for solving problems of maintaining the stability of banking systems, increasing customer confidence in banks and other credit institutions, and preventing cases of mass withdrawal of deposits during economic crises. The paper aims to examine why such an important pillar of the banking union as the European Deposit Insurance Scheme (EDIS) has not yet been implemented. The deadlock in the EDIS negotiations is unprecedented, and the likelihood that the agreement towards this pillar will be reached is rather low. The main reason for its blocking is the existing differences of interests between the main actors, and as a consequence, it makes the progress towards the completion of this process impossible. This study attempts to structure these interests, and it seems that the necessary tool to help bring them together is the concept of moral hazard. The results obtained confirmed the hypothesis that the main barrier for EDIS introduction is the severe difference of interest between countries that can be potentially major contributors and those that hope to benefit from that. Moreover, one of the arguments for such a delay is that cross-border subsidization leads to the problem when the country with better economic indicators pays for the debts of weaker economies as the costs should be socialized.
