Banks need new business models

With the onset of the financial market crisis nine years ago, the increasing digitization of the economy, and the unprecedented period of 0% interest rates, the following research question arose:

How does this affect the economic performance and liability situations of savings banks, cooperative banks, and Raiffeisen banks, as well as private banks—both immediately and potentially in the near future? And is the very existence of these financial institutions at risk?

Based on his essay“On the External Analysis of the Profit Structure in Banking Operations,”published long ago in the“Zeitschrift für betriebswirtschaftliche Forschung - zfbf”and subsequent analyses of the annual financial statements of six credit institutions for the years 2014–2015, Clemens Renker was led to conclude that, based on the premises identified, the survival of about half of Germany’s credit institutions could be at risk starting in 2020.

Now, the internationally renowned academic publisher SpringerGabler will publish Clemens Renker’s findings in a short book. Over the course of two years, Renker—drawing on evidence and supported by analyses from the Bundesbank and BaFin, as well as statements from their directors—identified ten key challenges facing credit institutions, quantified the potential consequences through 2020, and outlined a methodological approach for developing new business models.