Banking Growth Insights

"Our savings go to the USA, and with it, they buy our companies." With this powerful message, Enrico Letta has recently summarized the conclusions of his report on the future of the Single Market. The EU is home to a staggering 33 trillion euros in private savings, but this wealth is not being fully leveraged to meet strategic needs, with around €300 billion being diverted to markets abroad, primarily to the US, due to the fragmentation of our financial markets. This might seem detached from citizens' and companies' daily lives - a high finance issue that affects a few. However, it means less growth, smaller companies, and fewer resources available to fund better public health, education, and, down the road, pensions. The Banking Union is more of the same, as well as the development of a large European capital market, which would translate into more sustainable growth in Europe and better options for all its citizens. This is why the best entrepreneurs end up - mostly - setting up their new companies in the US instead of Europe. Since 2008, the American economy has grown more than twice as much as Europe. And companies in our continent suffer from a considerable size deficit; for example, Europe has almost six times fewer startups valued at over $1 billion (249) than the US (1,444) and fewer than China also, which reached 330. An essential ingredient of growth is investment, and there is no investment without credit. Europe has sound and well-regulated financial systems and enough savings to provide the financing we need. The time to deepen our Single Market and create a true Banking and Capital Markets Union is now so we can get credit flowing, grow, and secure prosperity for everyone.

Neobanks in the US have had a notable impact pushing incumbents to innovate, but they still face a lot of challenges. What can they do to up their play? On the one hand neo-banking penetration in the US is at 51% significantly higher vs European markets (source C-Innovation). On the other hand, almost all of the 80+ US players are unprofitable, with many having had to withdraw from the market. N26’s failure offers some lessons: —  Failed to differentiate and to articulate a convincing value-added proposition —  Underestimated resources needed with marketing at the top of the list —  Stronger competition than expected from established neobanks (i.e. Chime, Varo) —  High customer acquisition costs —  Navigating complex US banking regulations proved difficult Some region-specific characteristics aside, running a profitable digital bank requires certain patterns that are increasingly common across the globe: 1. A well-defined differentiation strategy with a clearly marked added-value proposition 2. Mass customization and personalized experiences employing #socialmedia and gamification techniques 3. Low customer acquisition costs combined with high brand awareness via a mix of innovative #marketing strategies (digital only, social-media first approach, targeted campaigns, search engine and app-store optimization, rewards, etc) 4. Payment services are not enough. A lending offering (interest income) is crucial for profitability (which is why embedded approaches like BNPL with their seamless, end-to-end integration are especially attractive). Of course, as the Revolut saga in the UK has showcased, the licensing piece that is needed for lending is not always a walk in the park 5. The ability to generate fee-based income by moving away from the initial freemium model into a more mature set-up that can charge various types of fees (e.g. transactional, account-based, fx or even penalties) for added value services, including subscriptions 6. A clever partner approach that leverages on the power of networks from a dual perspective: the aggregator one and / or the referral one (referral fees are a significant revenue driver) 7. An ecosystem approach that aims at building loyalty by means of creating a one-stop-shop set-up and subsequently cashing in on the additional services (and revenue streams) that evolve around servicing customers on a lifestyle basis (beyond #banking: transportation, shopping, dining, telecom, travel, etc) 8. A focus (and the know-how that comes attached) on servicing dedicated verticals (i.e. wealth management, SMEs) and on expanding to adjacent and complementary offerings (i.e. insurance, investments, treasury) There is certainly no single winning recipe but quite often profitability goes through successfully balancing a mix of a few heterogeneous elements under one roof: establishing trust and building long-term relationships with #innovation and a growth-mindset. Opinions: my own, Graphic source: C-Innovation

Guten Tag from Europe, where there’s an important contribution today to the debate about making the continent more competitive. Not only do we need to boost growth and productivity, we need an unprecedented degree of investment to stay resilient and relevant. A competitive and robust European banking sector is essential to fund this. This is a topic I have championed for years, and I am pleased to see a new report from Oliver Wyman and the European Banking Federation makes a timely contribution to this critical debate. One statistic lays bare the scale of what we’re facing: Europe faces an annual investment gap of €1.4 trillion to finance our collective digital, security and sustainability ambitions. Yet, as the authors rightly recognise, our issue is not a shortage of capital, but the barriers that prevent it from being deployed effectively. These include a fragmented and overly complex framework for financial markets as well as banking regulation that is too focused on risk avoidance, but not enough on also enabling growth. For years, I have said that regulation, while necessary for stability, in some cases overshoots the mark, weakening European banks in global competition. If we continue like that, we will deprive our economy of urgently needed capital to fund our ambitions. The report reinforces this view, showing how layers of complex and overlapping rules constrain European banks' ability to support the investments that are vital for innovation and competitiveness. This study comes two years after the landmark Draghi report made many similar points. Now we need bold, decisive and urgent action. It is encouraging to see the so-called E6 (Germany, France, Italy, the Netherlands, Poland and Spain) determined to go ahead with the Savings and Investment Union. Ideally, Europe as a whole should come along, because we cannot afford to wait. The report’s seven recommendations provide a clear roadmap, focusing on critical levers such as: ➡️ Rethinking how capital requirements are calculated, removing overlaps and duplications, and ensuring they are appropriately calibrated to the level of risk in order to expand financing capacity ➡️ Deepening capital markets to convert Europe’s idle savings into growth through a genuine Savings and Investment Union and accelerating reforms to boost the use of securitisation by banks to recycle capital into new lending ➡️ Fostering scale and integration by removing barriers To be clear: this is not a call for deregulation. It is a call for a smarter, more efficient, and coherent framework that preserves resilience while enabling growth. The cost of inaction is lack of growth and declining relevance. Europe has the capital and the innovative companies, and the banks to succeed. We need action to connect them. You can find the report here https://lnkd.in/gJjb7VYS

Good news: A clear trend in European markets. We see more and more securitisation of corporate loans. This can spur economic growth.   Here is why this matters:   💶 Securitisation turns pools of loans into tradeable securities. This can free up capacity for new financing and help transfer risks more broadly. The instrument’s economic impact depends on the underlying collateral. 📈 A look at the European market reveals a clear trend: securitisations backed by corporate loans are becoming increasingly important. 🏭 It shows how capital markets can help channel financing to the real economy. This is important as Europe needs more private investment – for innovation, the energy transition, digitalisation and defence. 🇪🇺 As the EU reviews its securitisation framework, the challenge is to expand financing opportunities while preserving financial stability. Well-calibrated reforms can help unlock additional financing opportunities for the European economy, provided that their effects are monitored carefully. Strong capital markets are not an end in themselves. They are a prerequisite for growth, resilience and competitiveness in Europe. #Finance #CapitalMarkets #Securitisation #EconomicGrowth #Resilience #Europe Deutsche Bundesbank

🆕 CEPS (Centre for European Policy Studies), ECRI - European Credit Research Institute and Deloitte release today a paper I have co-written with Pablo Zalba Bidegain and César Gurrea Alamayona: 𝘌𝘮𝘣𝘦𝘥𝘥𝘪𝘯𝘨 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘤𝘰𝘮𝘱𝘦𝘵𝘪𝘵𝘪𝘷𝘦𝘯𝘦𝘴𝘴 𝘢𝘴 𝘢 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘰𝘳𝘺 𝘰𝘣𝘫𝘦𝘤𝘵𝘪𝘷𝘦 𝘵𝘰 𝘣𝘰𝘰𝘴𝘵 𝘌𝘶𝘳𝘰𝘱𝘦’𝘴 𝘱𝘳𝘰𝘥𝘶𝘤𝘵𝘪𝘷𝘪𝘵𝘺 The EU often measures competitiveness through industry, innovation, energy or trade — yet overlooks the decisive role of finance. A strong and competitive financial system is not a technocratic luxury; it is a prerequisite for sustained growth, innovation and resilience. In the report, we distinguish between two dimensions of financial competitiveness: an 𝗶𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝗮𝗹 one, which looks at the profitability or costs of individual entities, and a 𝘀𝘆𝘀𝘁𝗲𝗺𝗶𝗰 one, which assesses the capacity of the financial system as a whole to mobilise savings, channel investment and mitigate risks. 𝗪𝗲 𝗳𝗼𝗰𝘂𝘀 𝗼𝗻 𝘁𝗵𝗶𝘀 𝘀𝘆𝘀𝘁𝗲𝗺𝗶𝗰 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀, because what ultimately matters is not how each bank or insurer performs, but whether the European economy as a whole is financed efficiently. Our proposal is to 𝗶𝗻𝗰𝗹𝘂𝗱𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀 𝗮𝘀 𝗮 𝘀𝗲𝗰𝗼𝗻𝗱𝗮𝗿𝘆 𝗼𝗯𝗷𝗲𝗰𝘁𝗶𝘃𝗲 𝗼𝗳 𝗘𝗨 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝘀𝘂𝗽𝗲𝗿𝘃𝗶𝘀𝗶𝗼𝗻 — complementing, not replacing, stability and consumer protection. The report also presents a 𝗱𝗮𝘀𝗵𝗯𝗼𝗮𝗿𝗱 𝗼𝗳 𝟮𝟴 𝗶𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀 𝗴𝗿𝗼𝘂𝗽𝗲𝗱 𝗶𝗻𝘁𝗼 𝗳𝗼𝘂𝗿 𝗱𝗶𝗺𝗲𝗻𝘀𝗶𝗼𝗻𝘀: financing capacity, profitability and value creation, resilience, and digital participation and innovation. The diagnosis is clear: Europe still lags behind other advanced economies in financing innovation, scale and digital integration. Yet countries that better balance stability, consumer protection and competitiveness are also those with stronger, more resilient financial systems. Ultimately, strengthening Europe’s financial competitiveness is not about favouring markets — it is about ensuring that Europe’s economy can fund its own future. Link to paper: https://lnkd.in/dxx9dqbQ You can read the paper here 👇

BBVA, DBS Bank, and JPMorgan Chase Use Foresight, Megatrends, and Strategy to Navigate the Future In today's fast-paced world, banks must anticipate the future rather than merely react to change. Foresight, megatrends, and strategy form a powerful framework to navigate uncertainty and drive success. 🔍 Foresight is not just prediction but a structured approach to exploring possible futures and informing current decisions. It involves identifying signals of change, challenging assumptions, and considering a range of scenarios, including unexpected events. For example, BBVA’s research department conducts trend analysis and scenario planning to anticipate disruptions and build resilience. This foresight enables BBVA to adopt a long-term perspective, uncover opportunities, and proactively adapt to challenges. 📈 Megatrends are transformative forces shaping societies, economies, and industries over time. Advances in AI, automation, and biotechnology are reshaping industries, while demographic shifts, climate change, and evolving consumer behaviors impact markets and strategies. For instance, DBS Bank identified Asia's economic rise and the growing demand for digital banking. By aligning with these megatrends, DBS positioned itself to enter emerging markets and tailor its offerings to future needs. ♟️Strategy bridges foresight and action, guiding businesses in resource allocation and competitive positioning. It leverages insights from foresight and megatrends to define objectives and foster agility. JPMorgan Chase, for example, diversified its business and invested in digital platforms and fintech startups, aligning its strategy with future trends to mitigate risks and seize opportunities. These concepts are interlinked: foresight identifies potential futures, megatrends shape the strategic context, and strategy guides action. The success of BBVA, DBS, and JPMorgan Chase highlights the value of integrating these approaches to secure market leadership. In a complex, uncertain world, foresight, megatrends, and strategy empower banks to move beyond reactive decision-making, proactively shaping their future and ensuring long-term success. #future #banking #foresight #megatrends #strategy #bbva #dbsbank #jpmorgencase 

Europe does not lack capital – Europe lacks competitiveness.   In the coming days, the European Commission will publish its report on the competitiveness of the European banking sector.   That this discussion is taking place at all is a positive development.   Over the past decade, Europe has rightly prioritised financial stability. As a result, European banks are today significantly more resilient and better capitalised than before the financial crisis.   But Europe now faces another challenge.   To strengthen competitiveness, security, innovation and the green transition, the EU is estimated to require investments of up to EUR 1.4 trillion annually in the years ahead.   At the same time, European banks are estimated to have around EUR 1.3 trillion less financing capacity as a result of capital requirements.   In other words: just as Europe needs to mobilise unprecedented levels of private investment, a comparable amount of financing capacity has effectively been taken off the table.   This stands in sharp contrast to developments in the US and the UK, where banks have gained up to USD 2.9 trillion in additional financing capacity. At the same time, six of Europe’s ten largest lenders are now non‑EU banks.   That should give us pause.   Because this is not about the interests of banks.   It is about Europe’s ability to finance growth, innovation and the ambitions we all share.   I hope the Commission’s report will help advance three important discussions: • Creating a genuine level playing field between European, American and British banks. • Reducing fragmentation and strengthening the Single Market for financial services. • Ensuring that regulation continues to support both stability and growth.   The objective is not less regulation – the objective is better regulation.   Financial stability and competitiveness are not opposing objectives. Europe needs both.   And finding the right balance will be critical if Europe is to remain prosperous, innovative and secure in the years ahead.

Big banks are closing branches. Community banks should be paying attention. TD Bank just announced another round of branch closures as part of its “digital-first” strategy. Let’s be clear on the facts: - Dozens of TD Bank branches are scheduled to close - Customers are being pushed harder toward mobile, online, and call-center banking - The move is driven by cost reduction and efficiency - not customer experience This isn’t unique to TD. It’s the playbook for many large banks right now. And here’s the reality: Digital transformation done wrong doesn’t feel innovative. It feels like abandonment. Customers don’t say: “I wish my bank had fewer humans.” They say: “I can’t get anyone to help me.” “I don’t feel known.” “Everything is harder than it should be.” That’s the risk many banks are taking. And that’s the opportunity for community banks. Yes - lean into digital. No - don’t use digital as an excuse to disappear! The banks that will win are the ones that understand this balance: - Digital for speed and convenience - Humans for trust, clarity, confidence, and retention! If your digital strategy removes friction and strengthens relationships, you’re ahead. If it replaces relationships, you’re training customers to leave. Community banks don’t win by trying to out-tech big banks. They win by doing what big banks can’t scale: Being present. Being personal. Being human - on purpose. Digital isn’t the threat. Losing the customer experience is. Choose wisely. #communitybanking #banking #bank Michigan Bankers Association Community Bankers Institute

🌎 Transforming Traditional Banks and Credit Unions: Lessons from Experience and Insights for the Future 🌎 After 21 years with ING Direct and Tangerine across several countries—and working with tech and fintech firms since—I’ve seen how transparency, customer-centricity, and innovation can transform banking. Yet here we are in 2025, and many banks and credit unions still face the same challenges we tackled years ago. 🤔 Customer Satisfaction Is Still Low Capgemini’s 2025 Retail Banking Report shows only 26% of customers are satisfied with their experience. As 💯 Jim Marous put it, banks may not be seeing mass exits, but they’re facing silent attrition—customers quietly moving products to neobanks like Nubank, Revolut, Stripe, Robinhood, Chime, and SoFi. Why is progress so slow? 🤬 Where the Friction Lies 1. Legacy Systems – Outdated tech makes it hard to offer seamless, personalized experiences. 2. Regulations – Compliance slows innovation—but it doesn’t stop it. 3. Cultural Inertia – Resistance to change is deeply embedded. 4. Data Silos – Fragmented systems mean fragmented customer views. 5. Fintech Competition – Agile, digital-native players are redefining expectations. 💪 Let’s be clear—THESE ARE NOT BARRIERS. They’re frictions. Frictions can be solved. Some of us built banks in environments where regulators hadn’t even imagined branchless banking. 🚀 Strategies for Transformation 🚀 1. Culture First – Customer focus must be embedded in the culture. Break silos, reward collaboration. 2. Modern Tech – Move to flexible, cloud-based platforms. Use AI and data to personalize. 3. Agility – Embrace iterative development. Test, learn, improve—fast. 4. Fintech Collabs – Partner with or acquire innovators to accelerate capability. 5. Customer-First Design – Simplify processes. Build trust through transparency. 6. Engaged Teams – Empower employees. Happy teams create loyal customers. Final Thought This isn’t about knowing what to do—it’s about doing it. Change is possible. I’ve seen it. Led it. Delivered it. So can you. If you're a bank, credit union, neobank or fintech ready to make real progress, I’d love to help. Whether in a C-level role or as an advisor, I bring experience that turns strategy into impact. David Bradshaw Andrew Chau Phil Taylor, FICB/FCSI American Banker Aline Badr PCC Brenda Rideout Stacey Schwartz Michael Giller Michael Aceto Gaurav Singh Mark Nicholson

Having extensive experience working in & with Banks, I have witnessed a growing trend among banks to adapt to the changing landscape, particularly in capturing retail and SMB flows. Transforming systems and processes within a bank presents its challenges, and especially when its for retail business - it generally is low on the priority list. Echoing the McKinsey & Company report call for a more targeted & segmented approach, I find two key strategies pertinent for bankers venturing into the cross-border retail and SMB payments market: **Embrace the Role of a Wholesale Bank**: Despite the emergence of new players and technologies, banks remain crucial for facilitating liquidity movement and finalizing transactions. This approach doesn't necessitate a complete overhaul of front-end systems but requires an enhanced understanding of risk management for these flows. Many global banks, such as JPMorganChase, Standard Chartered, as well as local banks, have excelled in this domain by leveraging an evolved risk management strategy & APIs for seamless connectivity to their core payments stack. **Adopt Real-Time Payments with Differential Pricing**: A substantial portion of cross-border retail and SMB payments involve bank account transfers and Fx capability, services already offered by banks digitally. Collaborating with a proficient partner equipped with a cross-border real-time payment infrastructure can streamline operations. For instance, Nium's Swift Connect empowers banks to leverage their existing Swift connectivity for real-time payments without altering front-end interfaces or payment workflows. These strategies serve as initial steps, with further value propositions highlighted in the report. When advocating for the significance of retail cross-border payments as a revenue stream within an organization, emphasizing a phased approach, showcasing early successes, and subsequently scaling operations prove pivotal. Drawing from past successes, like the establishment of a Retail Forex vertical at Axis Bank, underscores the effectiveness of this strategy. Banks aligning with Nium's platform under this strategic vision are experiencing tangible benefits and expanding their operations seamlessly.