Change in market demands, disruptive technologies and new delivery models have led to many industry speakers professing the death of the banks as we know them today. PA has talked with Idar Kreutzer, Head of the Finance Norway to get his perspectives on this debate.
PA: Idar – What do you consider to be the main arguments in favor of the death of banks?
Kreutzer: Banks will be key players in the financial markets also going forward. But the picture is dynamic and the roles will develop, as they have in the past. We face thoughts, considerations and success stories on disruptive companies and technologies. The market is floating with guesswork, but the two main drivers of change may be the blockchain technology and decomposition of the value chain. Blockchain and value chain decomposition may affect key operations currently served by banks.
PA: Do you believe we will experience the death of the banks?
Kreutzer: Absolutely not. The banks will play a significant part in our society’s’ eco-system in the future as well. The FS industry will benefit from facing competition and challenges, and incumbents will need to step up to these challenges and adjust to disruptions.
PA: What are your thoughts on how the FS companies will adapt to the emerging disruptions?
Kreutzer: We typically see two responses from incumbents on disruptions. One is focusing on the regulatory and compliance requirements. Incumbents do not close their eyes to the world around them, but fight back with strong and customer friendly solutions that are compliant with regulatory requirements, and with scalable and cost efficient operations.
The alternate response is to embrace the disruption and partner up with new disruptive entrants and Fintech companies that can add additional value to existing services or to their value chain. Although some sceptics would argue that the value chain is becoming blurred, the “embracers” do not fear that they will be pushed out of the value chain, as they still consider the banks to be the core of the value chain.
PA: It seems inevitable that the Nordic banks’ positions will face threats one way or another. Do you see any positive outlooks?
Kreutzer: Of course! Nordic banks have historically proven themselves highly competitive with strong performance and capabilities, and they are very well capitalised. I hope to see a development where Nordic banks utilise their capabilities to expand in new markets, also outside the Nordics. In their home markets, they will take responsibility for providing corporates, the public sector and individuals even more innovative and customer friendly services.