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Wrap up: Retail Banking Conference

Wrap up: Retail Banking Conference

​​​​​Conference summary ​by ESBG Managing Director Chris De Noose

Retail Banking Conference

28 October 2020

The virtual edition of the Retail Banking Conference held in October brought together panellists and presenters who provided a first-rate exchange on the challenges facing Europe, its citizens and savings and retail banks in Europe.

Forthright and inspiring exchange flowed. Banks form part of the solution to challenges by brining liquidity to the real economy, namely sustaining small- and medium-sized enterprises and households alike. We also heard from experts on the digital shift catalysed by Covid-19 and the perils of a low interest rates.

Participants proved sanguine about banks solid and resilient position, able to withstand pandemic-induced stress. The question is what asset classes will deteriorate when support measures fade.

Mr. Enria shared candid insights as the top European banking supervisor. He explained that we are “flying blind" so to speak, as we don't know when and to which extent the problem of non-performing loans could materialise. A lot of uncertainty remains as MEP Tinagli rightly stated in her remarks.

Savings and retail banks need to prepare. And as Mr. Enria noted the need to try to be ahead of the curve – do not wait until it is too late. Work with customers, engage them as soon as possible. This avoids cliff-edge effects. ESBG members take a close-to-customer approach, which helps them better address uncertainty ahead.

One could not agree more with what ESBG President Helmut Schleweis said in his introductory remarks: Europe will not thrive without taking into account the ecological and social aspects of economic activity. Those points were echoed in the second panel, where European Investment Bank Chief Climate Change Expert Nancy Saich underlined that banks prove crucial partners in finding ways to solve the Covid-19 and sustainability crises.

While Mr. Enria clearly and rightly stated that digital banking emerges more and more relevant, customers demand it and savings and retail banks deliver. Digitisation needs a level playing field between FinTechs and BigTechs and locally focused banks. Groupe BPCE Director Public Affairs Benoît de La Chapelle-Bizot said it best: digitalisation is a game changer.

Solidarity in our communities, regions and EU member states looks more important than ever. By working together, banks, their customers, policymakers and the rest of society can overcome these extraordinarily challenging times.

Panel 1: Retail banks facing the crisis – long-term effects of the coronavirus

He first panel gave us a chance to explore deeper how the savings and retail banking business model works in addressing challenges before us. CaixaBank Chairman Jordi Gual explained that ESBG savings and retail banks work for the financial well-being of customers and society. They know our role and our customers, which has always defined the model.

So many forces now interact at once to propel retail banking into a digital future within a digital Europe. Savings and retail banks need to come out of this crisis in a healthy position to build a future that policymakers and citizens crave. To do this, proximity and proportionality will matter more than as it does now. 

Jonás Fernández, a European parliamentarian, offered help to the banking sector, which is much appreciated from ESBG's standpoint. As he said, we all need to support each other to prevent an economic crisis being joined by a banking crisis.

European Commission DG FISMA Director Martin Merlin expects that a recently proposed package by the Commission will level the playing field between banks, FinTech and “BigTech" companies. It is urgent to tackle this issue. Doing so will give a boost to financial stability, protect consumers and help in the fight against anti-money laundering.

Karl-Peter Schackmann-Fallis, an executive board member at the German Savings Banks Association (DSGV) also referred to the quick fixes that have been negotiated by decision-makers. This is exactly the kind of help that banking institutions need so that they keep serving the real economy through these tough times. Mr. Gual also made a well-needed suggestion: public support could, ideally, in the future, take place through equity, rather than debt.

Panel 2 highlights: Sustainable finance – A golden dawn after the Covid-19 darkness?

The second panel on sustainable finance explored the tension between immediate pressure to sustain economic growth and building a sustainable future. When it comes to a sustainable future:

Ms. Amrit Rescheneder, from our Austrian member, rightly emphasised that – going forward – social fairness is a key challenge, and it is a key task to take care of by savings and retail banks. European parliamentarian Sirpa Pietikäinen also referred to the importance of a transitional phase for so-called brown companies. She also pointed out quite rightly that sustainability challenges are global: so are capital markets. Global approaches are much needed.

We must never forget that financial flows and real-economy financing start locally. To transform economies to a sustainable future, retail banks have an enormous effect – reaching the whole part of the European economy. 

Additional highlights from panel 3: Financial innovation and digitisation – the endgame

Digitisation and branch banking go hand in hand to help meet customers needs. ESBG members reach more than 164 million Europeans through close to 50,000 branches and digital reach. Adding to what I mentioned before from Benoît de La Chapelle-Bizot of ESBG member BPCE argued that banks must offer a compelling set of products and services.

On a level playing field, Mattias Levin from the European Commission said rightly that “Same activity, same risks, same rules" must apply for the financial sector with new, and not so new entrants. As financial education is a must in a digital world – for staff and customers alike, it is a broad issue – finding its way into all sectors of the economy. In finance and digital. Mr. Levin said efforts by the European Union can help, but only to a point. The final panel showed that financial innovation requires vision from all parties involved. At strategic level, Europe needs payment sovereignty while creating secure, dependable, and instant payments.

Banks form part of the solution

Banks play an important part in being part of the solution that includes actors like regulators and supervisors as well as all stakeholders. Measures by EU authorities were quick, swift and effective. Savings and retail banks welcome policy efforts to help us manage uncertainty.

At the same time, members stood on sound footing before the crisis. Because of this, they could provide high-quality service while providing much-sought liquidity to businesses and households and tapping into deep local roots.

While economies grapple with Covid-19, we also need to tackle a sustainable future. We are in “change of an era", which means the social pillar needs careful consideration along with environment and governance.

We must embrace a 'change of an era'. While change is afoot, one thing remains unmovable the trust of Europe's citizens in savings and retail banks.


Financial inclusion; Digitalisation; Innovation Hub; Innovation; Covid-19; Basel III