ESBG, German Savings Banks Association President delves into EU banking rules
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Published online on 28 February 2019
Savings banks and retail banks play an important role as intermediaries in Europe. They foster European cohesion and convergence. They play an important role as lenders in the economy and as partners for the accumulation of assets. However, they also play an important societal and social role. We facilitate participation in society in the regions in which we operate. We assume responsibility in these regions, and this has a stabilising effect on the community as a whole. In my view, this is particularly important nowadays. In this role, we are unique and particularly valuable for Europe. For this reason, we have joined forces to campaign for a favourable environment in Europe for savings banks and retail banks.
In my view, ESBG is an important additional mouthpiece for all its members vis-à-vis the EU institutions and the EU regulator. Many politicians at EU level have realised that it is important to engage in a dialogue with ESBG as a representative of 1,000 retail banks in 21 EU countries if they want to support finance for small and medium-sized enterprises and for private households. We will therefore continue to foster this exchange. In the discussion about proportionality in banking regulation, attractive and modern payment services, and sustainable financing, we want to obtain the best possible environment for ESBG members.
In addition, an exchange of experience among ESBG members in various formats is very useful. It is important to continue to foster this exchange unabated.
Retail banks can learn a great deal from each other. Moreover, fostering mutual understanding in Europe is an ongoing challenge. I am very grateful to my predecessor Isidro Fainé for the service he has rendered to ESBG. We will continue to develop the common denominator of savings banks and retail banks over and over again.
As regional retail institutions, we need a favourable environment to provide optimum benefits to business and society. The Banking Package will go some way towards making regulation, which was originally designed for internationally operating big banks, more appropriate – and hence, more tolerable – for retail banks. However, this process has not yet come to an end. In the new legislative period, work will begin on the implementation of the new Basel requirements. This will once again raise questions regarding the nature of proportionate regulation. This is also something we need to discuss within ESBG because many SMEs – and hence, important segments of the national economies in our respective countries – depend on the loans granted by our institutions. Small and medium-sized enterprises prefer bank loans; capital market finance is not an option for them. It is therefore worth fighting for good financing terms.
We will also need to deal intensively with the structure of sustainable financing concepts. In this context, ESBG clearly supports the objective of creating a sustainable EU economy.
However, we will have to make sure that whatever is decided will in fact be helpful in achieving this objective. I would like to warn against unwanted side effects that might restrict access to financial services, both for private households and for enterprises. In any event, we have to fend off unwanted social effects.
A large portfolio of SME loans is clearly less risky than the same volume of a few large exposures. Since we are able to back this up with empirical evidence based on figures collected over many years, we have been successful in anchoring the SME Supporting Factor.
In my view, one crucial point regarding savings banks is that they know both the local market and their customers. Our customer relationship managers maintain their relationships with enterprises and commercial clients for many years, sometimes for generations. This helps to create strong relationships that are needed in the lending business. Many of the export-driven enterprises that make Germany an export nation have precisely this kind of trusting relationship with their savings banks. And many of my colleagues in ESBG have told me that their credit institutions play a similar role in their home markets.
The savings bank branches continue to be the cornerstone of customer relationships. This key point of contact is expanded and complemented by digital and mobile services. We offer customers a full range of services, and every customer can decide individually how and when they want to carry out their banking transactions. We have become the market leader across all channels. Savings banks have the largest number of branches in Germany, with leading market shares in particular in retail banking. In addition, approximately 19 million customers with over 40 million accounts take advantage of the online banking options we offer. More and more customers are using mobile devices such as smartphones and tablets to access their accounts. In 2017, these devices already accounted for over 30 percent of the total volume of transactions. The savings banks’ websites have 2.5 billion visitors per year, which puts them into the top group of the most widely used Internet services1.
However, we do not plan to rest on our laurels. In 2018, savings banks added two important products to their range of services: instant payments, and payments from mobile phone to mobile phone for retail customers. This means that savings banks have entered the German market faster and with wider coverage than most competitors, and savings banks have achieved respectable usage rates. In 2019, the focus will be on two new topics: We will embed the multi-bankcompatible current account in a digital platform, where we will also integrate self-learning algorithms to better align our services with customer preferences. At the same time, we will expand our range of services for enterprises, including an Internet branch for commercial clients.
We will also look closely at the benefits that we can generate from our databases for our customers.
I am convinced that we will be successful if we stick to our values and strengths.
The common goal pursued by the institutions within ESBG is described by the three “Rs” – retail, regional, responsible – which serve as an excellent compass.
EU Commissioner for Competition Vestager recently said in Berlin that I was not sufficient to successfully wave the European flag in the world markets, but that enterprises would also have to make a contribution toward building a better, safer, more prosperous and more sustainable society. As regional retail institutions, we strengthen competition in the European Union in many ways, and we assume responsibility in society. If we remain true to our principles, I am confident that regional, responsible retail banks will continue to play an important role in the European banking market in the future.
1. DSGV, Circular on annual figures of digital channels, 2018/151, 2018.
Helmut Schleweis biography
Helmut Schleweis was born in Heidelberg and began his professional career in 1973 at the local savings bank. In 2002, he was appointed Chairman of their Management Board. Since 2010, Helmut Schleweis has been a Federal Chairman of the German Savings Banks and 3rd Vice-President of the DSGV (German Savings Banks Association); in this capacity, he has represented the interests of Savings Banks in many institutions of the Savings Banks Finance Group, in particular in the Group’s associated companies. Schleweis heads the umbrella organisation of the Savings Banks Finance Group, Germany’s largest and leading financial network. The Group includes 390 Savings Banks, seven Landesbank Groups, eight Landesbausparkassen, eleven direct insurer groups, as well as many additional financial service providers and other associated companies, with a total of over 320,000 employees.