United States President Donald J. Trump received an unexpected valentine last week from Janet Yellen, chair of the Board of Governors of the Federal Reserve System. The higher interest rates President Trump pledged through jawboning the Federal Reserve are coming.
Cybercrime is one of the most critical growing threats facing the global-banking industry today, and it managed to claim another major victim recently. On the weekend of November 5th and 6th, 2016, Tesco Bank was subjected to a hack that saw £2.5 million siphoned off from 9,000 of its accounts in what some security experts are describing as the most serious attack to ever hit the United Kingdom’s banking sector.
Much has been made of Europe’s struggling banking sector since the turn of the decade. In October, for instance, the International Monetary Fund (IMF) reported that across the world, banks that were in charge of approximately $12 trillion of assets will continue to remain vulnerable, even if a global economic recovery takes hold.
In the aftermath of the United States 2016 presidential election, there has been much debate over whether Russian hackers interfered with the electoral process in order to help secure a victory for Donald Trump. Around the same time, however, it was revealed that Russia was the victim of cyberattacks of its own.
Institutions from government to universities are no longer what they once were in the public mind, but banks have fared worse in the court of public opinion than many others, according to a Gallup poll.
Turkey has suffered a series of blows in recent months, not the least of which originating from Moody’s and Standard & Poor’s, which removed the country’s investment-grade credit rating. These downgrades have reverberated throughout an admirably resilient Turkish banking industry, making tough times just that much tougher, as the overall economy slumps.
Customer trust is the foothold of all commercial activities, especially financial services. Customers need to trust their financial institutions to protect their assets and work toward their best interests. Without first gaining customer trust, a bank is likely to find itself constrained from warding off competition and pushing forward into further growth.
The road ahead for investment banks remains bumpy and curvy, and navigating it will require that each institution take bold action to enact the business model that will enhance its strengths in today’s challenging economic climate. Despite some recent gains, factors such as high costs and product complexity are still weighing the sector down.
When crisis strikes, people automatically seek a few items first—top amongst them being cold, hard cash. How can financial institutions ensure that they are not caught off guard but instead best help their customers and staff prepare for and survive crisis, no matter how and when it hits?
For years the banking industry in the UK was dominated by a handful of big banks. But that’s changed within the past six years, as new spinoff challenger banks have muscled into the arena; lying somewhere in between traditional banks and fintechs, technology-oriented challengers are sure to drive the industry into unchartered territory.