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Future Banking Winter 2021


Editorial Editor Andrea Valentino Sub-editor Phoebe Galbraith Production manager Dave Stanford Group art director Henrik Williams Designer Scott Thompson Head of content Jake Sharp


Commercial Client services executive Derek Deschamps Publication manager Sanjeev Dole sanjeev.dole@progressivemediainternational.com Co-publisher Christopher Watts Managing director William Crocker


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n 1942, Joseph Schumpeter declared that global capitalism could be distilled into a single idea: “a perennial gale of creative destruction”. The Austrian economist’s famous dictum is obviously appealing, especially now that the winds are up and ruin seems just around the corner. The numbers, after all, are stark.


Out of the ashes? I


Even before the pandemic, traditional high street banks were struggling in the face of sexier alternatives. With their slick UXs and their instant feedback, start-ups have gobbled up account holders in droves. Of course, the stresses of Covid-19 have only accelerated these trends. According to a survey by Finder, 27% of adults in the UK had opened a digital-only bank account as of January 2021, a considerable rise on 9% two years ago. This is shadowed by the gradual collapse of traditional branches. Over 4,000 banks have closed their doors across the UK since 2015, a figure that comes to around 50 a month. There are broader strains too, from environmental pressures to tensions with external cloud providers. All this is reflected in the comments of CIOs, 47% of whom are struggling to find the right skill sets to fit their rapidly shifting organisations. In other words, there is plenty of evidence that the old ways of doing banking are being swept aside. But if we take Schumpeter at his word, shouldn’t we also be enjoying a gust of creative energy too, with insiders battling to craft something new from the ruins of the old? This edition of Future Banking is an attempt to put Schumpeter’s maxim to the test. To that end, we explore how BBVA and Nordea are developing new customer-facing digital platforms on page 8 and 41, respectively, and how ING is promoting carbon-neutral investments on page 52. This is shadowed by the gradual collapse of traditional branches. We look at how banks in the Baltic are using a history of scandal to push through reforms on page 11, and how competition from new state-backed currencies could force commercial lenders to improve their creaking services on page 28. To put it another way, this is an industry that certainly seems to have the winds of renovation at its back – even if it remains to be seen how much gets ruined along the way.


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