Business model analysis - European banking sector model in question

Article

Business model analysis

European banking sector model in question

The sluggishness of the profitability of the European banking sector should push a deep market transformation under the scrutiny of the Business Model Analysis (BMA) performed by European Competent Authorities, and especially by the European Central Bank (ECB) for banks supervised under the Single Supervisory Mechanism (SSM).

Executive Summary

Since the financial crisis emerged eight years ago, the banking industry has been facing major disruptions shaped by several dynamics, resulting in a shift of the bank’s playing field. One of those dynamics is driven by EU Supervisors, who are willing to create a more stable banking sector through harmonized rules at the EU level and stricter risk and capital requirements. A second dynamic distorting the bank’s playing field is the low interest rate environment resulting from the state of the economy. Finally, the digital revolution has fundamentally changed the way people think and the way the world conducts economics and business practices, opening the door to competitors in a mature industry. Taking individually, those dynamics should have a positive impact on the banking industry—combined together, those forces are sources of disruption that requires financial institutions to reconsider their business model.

In this article, we are exploring the impact of those dynamics on the bank’s playing field and explain why banks must reconsider their business models in order to remain viable and sustainable, especially with the introduction of regulatory oversight over EU banks’ profitability (Business Model Analysis).

PDF - 704 KB

Inside Magazine - Global edition 2017

Inside is Deloitte’s quarterly magazine offering an exclusive insight into best practices, trends and opportunities faced by our clients across all industries.

Inside focuses on the main hot topics relevant for the market (Asset management, Banking, Insurance, Public sector, Healthcare, Private equity, Real estate, TMT, Manufacturing and consumer business, Transport and logistics).

PDF - 12.3 MB
Did you find this useful?