Speech Delivered by Christian Sewing at the Handelsblatt Banking Summit 2024 (Unedited, Note for Reference)
In the face of significant challenges, German banks are actively adapting their strategies to navigate the complexities of digitalization, volatility, sustainability, and high public debt.
## Digitalization
Recognizing the need for innovation, the German banking sector is undergoing a digital transformation. This shift includes the launch of fully digital banks, such as BBVA's new digital bank in Germany, offering advanced services like interest-bearing accounts with no fees and enhanced card security features. The sector is advocating for more regulatory freedom to fully leverage digital technologies like AI and tokenization.
## Volatility
Amidst global economic uncertainty, German banks are prioritizing robust risk management strategies and diversifying their offerings to mitigate economic shocks. The ability to adapt quickly to changing conditions is crucial, with investments in digital infrastructure to improve operational efficiency and responses to regulatory changes being key.
## Sustainability
German banks are increasingly focusing on sustainability, investing in green technologies and social initiatives. This aligns with broader European efforts to address climate change and sustainable development. Banks are incorporating Environmental, Social, and Governance (ESG) criteria into their investment decisions, reflecting a shift towards more sustainable banking practices.
## High Public Debt
Germany's recent shift in fiscal policy from restraint to investment will impact public debt levels, with plans to spend €500 billion over 12 years on infrastructural and military investments. While high public debt poses challenges for economic stability, German banks must manage risk effectively through prudent lending practices and diversified portfolios. They are also likely to support infrastructure and development projects aligned with the government's fiscal plans.
In summary, German banks are actively engaging with digitalization, managing volatility through robust strategies, focusing on sustainability, and addressing high public debt by supporting fiscal initiatives while maintaining financial stability. The integration of real-time analytics, machine learning, and automation can optimize operations, reduce risk, and deliver value to clients in securities and currency trading.
Banks need to make extensive investments to meet clients' needs, with this trend benefiting industry's big players. Fintechs are seen as partners rather than substitutes for banks in the transformation process. The ability to grow is crucial for ensuring prosperity and the functioning of the welfare state, with public debt being a trend that will shape the coming years, making banks more in demand for financing defense, artificial intelligence, and green tech.
[1] BBVA launches new digital bank in Germany (Handelsblatt, 2023) [2] Germany to spend €500 billion over 12 years (Reuters, 2023) [3] Digitalization in German banking: regulatory challenges and opportunities (Bundesbank, 2023)
- Facing the demands of the modern financial landscape, the German banking sector, particularly in light of the rising influence of fintechs, is collaborating with digital disruptors to upgrade services and offerings, such as BBVA's new digital bank, while advocating for more regulatory freedom to better exploit cutting-edge technologies in commerce, politics, and general-news sectors.
- Amidst growing concerns about climate change and sustainability, German banks are proactively investing in green technologies and social initiatives, integrating Environmental, Social, and Governance (ESG) criteria into their investment decisions, and supporting infrastructure and development projects aligned with the government's fiscal plans, demonstrating an overarching commitment to sustainability in business, politics, and general-news arenas.
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