No industry is safe from the fast march of digital progress, and the banking sector is no different. In Europe alone, well over a thousand fintech companies have launched in the last decade and, as of 2016 according to Accenture, these same fintechs make up almost 7% of the industry's overall annual revenue.
There are forces at work aiming to reshape the banking sector, and retail banks need to choose whether they want to brace for impact or lead the charge. With 2018 winding to a close and retail banking in a state of perpetual change, everyone's eyes are currently on 2019.
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The constitutional crisis in Italy was induced by the March general elections, which saw anti-establishment parties Lega and the Five Star Movement grow dramatically in vote share. Both endorsed an economic plan that hinged on Italian withdrawal from the EU.
Does ethical banking really exist?
It’s certainly one of the ambitions of United Nations member states, who came together in 2015 to thrash out a set of 17 Sustainable Development Goals (SDGs), spanning numerous aspects of the world economy.
A number of financial institutions have publicly declared their actions and intentions in support of the SDGs. Bank of America is committing $50m to ‘activities that advance the low-carbon economy’ and Citigroup has produced an entire report that maps the CDGs to Citi initiatives. DBS, Rabobank and Credit Suisse are just three of the other global giants that have pledged to support these goals, setting out very clearly which of the 17 are their areas of focus, and how they plan on creating real, measurable change.
When it comes to technology, early adoption doesn’t always lead to ongoing efficiency.
Britain’s railway system, for example, is the oldest in the world, with wagonways first built in the 1950s. Now, though, the system is out of date, and proving tricky to improve. Just 34% of British train lines are electrified, the trains and carriages used are 21.1 years old on average, passenger complaints are on the rise and just 62.5% of British trains arrive at station stops on time.
The Japan National Railway, on the other hand, was privatised in 1987, with much work done to improve its infrastructure in the years since. As a result, the average length of delay is just 0.9 minutes on the Shinkansen line, and Japanese trains are built with a lifespan of a maximum of 15 years to keep things new.
Debt collection is in trouble - especially when it comes to delinquent credit. According to figures from the International Monetary Fund’s Global Financial Stability Report, non-performing loans make up 3.925% of total gross global loans.
While this figure is down from its high of 4.064% in 2014, certain countries exhibit a far more worrying ratio: countries such as San Marino at 43.4%, Greece at 36.3% and Sierra Leone at 30.7%.
According to the Supervisory Banking Statistics Fourth Quarter 2016, the average rate of non-performing loans of large European banks stood at 6.17% - a figure that is growing, and that dwarfs countries such as Japan and the US which saw rates of just 1.5% during the same time period. The cost of servicing a delinquent loan, say Gartner, now stands at 15 times the cost of servicing a performing loan.
Social media is an important factor for any retail banking organization’s success—whether or not you're already using debt collection software to build a multichannel approach to customer communication.
It’s important to have a social media presence and represent your organization in the best way possible. Why? Because if you’re not active on social media, conversations about your product and services take place without your involvement.