Some people and business owners still do not have bank accounts, most in rural communities of developing nations. But the situation is improving as technology opens doors to financial inclusion for the previously excluded. In what specific ways is increased banking access being achieved, with governments working alongside financial firms?
If further evidence was needed, the successful £322m fundraising by UK’s Starling Bank is a clear signal that digital-first newcomers will continue to force change in the banking industry, impacting long-established banking brands. To find their way back to the surface of this maelstrom of change, a step-change in traditional banks’ revamping of legacy technologies must be a priority.
With COVID-19 still dominating the narrative across the global banking industry, arguably the biggest challenge lenders will face in 2021 is how best to maximise the customer experience amidst such a challenging environment. Indeed, given the low interest rates that have continued to weigh heavily on banks’ net interest income (NII)
The Covid crisis has shown that the reform of international financial regulation in recent years has not corrected the procyclicality of the financial system. On the contrary, this problem has worsened as a result of the new accounting standards. This article explores the reasons for this and possible policy measures to address the problem, including a more rules-based approach to macroprudential policies and a rebalancing between countercyclical and structural buffers in favor of the former.
Digital currencies are proliferating around the globe, with even the bigtech players such as Facebook jumping in. What about central banks issuing their own central bank digital currencies? Many central banks are weighing the advantages and disadvantages of CBDCs so as to minimize disruption. More recently, six central banks announced that they will work jointly on this issue with support from the BIS, which shows the increasing focus on cross-border implications.
Sustainability is popular in so many ways today, including in investment. It’s not surprising that banks are going all out to link their brands with such a trendy concept. But Lundquist has dived beneath the surface to determine where European banks really stand on sustainability, how it is molding their corporate strategies and communications. The results prove that most banks still have a way to go to be fully credible.
There has been a rapid increase in the size and number of investments into UK fintechs with the likes of Monzo and Revolut leading the charge. Interestingly, it is not just the VC funds driving this; banks are also investing or in many cases, acquiring fintech companies outright.
The Great Recession produced a number of aftershocks, including a tidal wave of regulations (with the?) intent on preventing the same event from ever happening again. A mismatch between increasingly complex and detailed international standards and ever more uneven implementation by national authorities ensued. Consistent, harmonized adoption of financial standards by all involved is necessary to ensure smooth global processes. Some suggestions are presented in this article.
Open Banking, which allows third parties to build applications around the activities of established banks, is curtailing the way banks have always functioned. The tried-and-true vertical-integration model, through which a bank maintains a firm grip on all of its operations, is being replaced by a more cooperative approach. How will innovative banks fulfill their roles as suppliers, producers and retailers of financial products and services in the Open Banking era?
The trend toward global interconnectedness has never been stronger, with innovation and technology helping to make the impossible now possible. The rewards are vast in terms of reduced cost, increased opportunity and greater inclusion, but there is an obstacle that is slowing progress: existing proprietary banking infrastructure. Fortunately, that’s not the end of the story, as the way is being paved for full worldwide banking integration.