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Topic: Retail Banking

ESBG’s Retail Banking Conference explores future of retail banking amid challenges and opportunities

Held on 30 November, the ESBG Retail Banking Conference 2023 brought together a constellation of banking experts, policymakers, and industry leaders. This annual event, a tradition since 2008, tackled the pressing challenges and evolving landscape of the banking sector, offering a comprehensive exploration of crucial issues shaping the future of retail banking.

Kicking off the conference, Peter Simon, Managing Director of WSBI-ESBG, highlighted the major role of retail and savings banks amidst economic uncertainties. From geopolitical tensions to energy price fluctuations, Simon underscored the significance of these institutions in ensuring financial stability and fostering economic growth.

Delivering the first keynote speech, Mr. François-Louis Michaud, Executive Director of the European Banking Authority (EBA) discussed the early lessons from the recent banking turmoil providing a regulator’s standpoint on new risks in the current interest rate environment. Comparing European and U.S. regulatory approaches, he emphasized the importance of ongoing efforts to assess the sector’s health, particularly in a high-inflation environment. Michaud also delved into the role of banks in addressing climate change and sustainability, stressing the need for regulatory stability.

Mr. Thomas Matis, Senior Manager Financial Services of KPMG made a short presentation during which he presented findings on the ongoing discussion of inducements in the German retail investment advisory market. He highlighted the preferences of German retail investors for personalized guidance and the potential impact on engagement with financial instruments if investors are unwilling to pay for advisory services. During the first panel, MEP Stephanie Yon Courtin, Evert Van Walsum (ESMA), and Christian E. Castro (CaixaBank) led a crucial discussion on the Retail Investment Strategy. Ms. Courtin stressed collaboration for navigating over a thousand amendments, underlining its impact on the retail banking future. Van Walsum highlighted aligning frameworks with banking needs, emphasizing adaptive legislation. Castro added practical insights, focusing on the delicate balance required for effective regulation. The discussion centered on trust and transparency’s pivotal role in legislative frameworks, acknowledging the multifaceted challenges faced by the retail banking sector. The panel refrained from advocating one-size-fits-all solutions, considering the potential impact of banning inducements on accessibility for lower-income consumers.

The ambiance shifted to a dynamic rhythm as Fiona Van Echelpoel (ECB), Peter Kerstens (European Commission), Erik Ljungberg (Swedbank), and Andrea Tessera (Banca Sella) explored the delicate balance between disruption and tradition in Open Finance with the moderation of Mr. Diederik Bruggink, ESBG’s Head of Payments, Digital Finance and Innovation. Ms. Echelpoel emphasized trust as fundamental in financial services, underscoring the need for transparent, clear communication, and ethical conduct. Mr. Kerstens delved into the technicalities, stressing responsible data exchange and the crucial role of purpose limitation in safeguarding against misuse. Mr Ljungberg, for his part, highlighted regulatory oversight’s role in fostering innovation while preserving alignment with data protection regulations, introducing regulatory sandboxes as key tools. Mr. Tessera concluded with a focus on common standards and interoperability, crucial for seamless integration of financial data across diverse sectors.

In the fireside chat, Ms. Arianna Vannini, Chief Economist DG INTPA, International Partnerships European Commission addressed global economic challenges and the evolving financial architecture, emphasizing the significance of public-private partnerships for investments in climate, digitalization, and sustainable development. She was followed by Ms. Ana Puente Pérez, Head of Sustainability and Digital Finance at the Spanish Ministry of Economy and Digitalization who took the stage to deliver the second keynote speech. Ms. Pérez summarized the Spanish Presidency’s focus on banking regulation, including Basel III, CRD V framework, PSD2, Digital Finance Package, and the Capital Market Union. Sustainable finance and the EU Green Bond Standard were highlighted to align financial regulations with environmental objectives.

Panel 3 illuminated the role of retail banking in steering sustainable finance. Featuring Marcel Haag (European Commission), David Lukas Rozumek (IMF), Veronika Pountcheva (ISSB), and Karolin Schriever (DSGV), the discussion navigated key aspects of this crucial landscape. Mr. Haag highlighted the challenges in aligning retail banking with evolving sustainable finance regulations, emphasizing the need for consistent and streamlined rules. Ms. Pountcheva shed light on ISSB’s efforts to establish international sustainability disclosure standards, focusing on a universal baseline and climate-related disclosures to meet investor demands. Ms. Schriever delved into the challenges faced by retail banks in the green transition, emphasizing the importance of simplifying disclosure processes. The panel stressed the need for sustainability reporting frameworks aligned with corporate strategies, with a commitment to developing manageable frameworks for SMEs, ensuring financial access without excessive reporting burdens.

In her keynote speech, Ms. Patricia Reilly, Head of Cabinet of Commissioner McGuinness discussed financial and regulatory topics, emphasizing the importance of financial stability, market integrity, and consumer protection. Regulatory initiatives, such as simplifying reporting requirements, benchmark regulations, and promoting open banking, were highlighted.

As the host of the event, Ms. Dominique Goursolle-Nouhaud, President of ESBG expressed gratitude for conference participation and emphasized the crucial role of savings and retail banks in Europe. Addressing challenges and opportunities in the digital transformation, she stressed the need for proportionate banking regulations and collaborative efforts among stakeholders.
The ESBG Retail Banking Conference 2023 provided a platform for rich discussions, diverse perspectives, and a shared commitment to navigating the dynamic future of retail banking.

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