“Industrialisation” of the banking sector

The banking sector is competing with other industries for the capital of investors. In light of the banking sector’s specific risk profile, investors’ expectations of a return on their investments require steadily rising value creation which has to be generated by growth and/or increased efficiency. But banks soon reach their national thresholds even after using all their internal rationalisation potential and after unlocking the synergies provided through local mergers. All the more, since their corporate customers are already working with international networks. Private and institutional customers are also availing themselves of global facilities for their investments. And on the supply side, specialised niche providers such as the direct banks have already penetrated the domains of national universal banks with lean business models.

The performance targets can therefore only be met if economies of scale and scope are achieved through supra-regional cooperation and the integration of dynamic markets – while of course also meeting the varying local customer needs. Other industries have led the way in this respect; motor vehicle production is a frequently cited example. Motor vehicles are produced by employing substantial capital and state-of the-art technology in numerous locations throughout Europe. The "platform system" permits the design of numerous different models which appeal to local tastes whilst complying with local regulations, but which are based on only few platforms. The franchise is communicated via a clearly discernible brand architecture, with differentiation on the outside and simplification on the inside.

A similar principle can be applied to the banking sector. Although our market in Europe is still very fragmented, this will eventually change for the better. We are now working to create a Single Financial Market, and the day will come when cross-border products and services will be a common feature of retail business. A declared objective of EU policy is to complement the Single Market with the Financial Services Market. This is reflected in the Financial Services Action Plan with its 40 initiatives. A number of Directives are moreover about to be implemented, e.g. for the creation of the Single Euro Payments Area (SEPA), for consumer credit and mortgage credit, and for facilitating the international sale of mutual funds. Once again, protected areas will fall away. In the financial sector we will have a uniform licensing, regulatory and competitive framework – a level playing field – earlier than many anticipate.