It is imperative that individual regional banks think about what they are there for. They have a clear mission. Cooperative banks, for example, promote their members and their profitability, they help and empower them. In principle, this is possible through conventional banking transactions, but it is also conceivable to do it in a completely different way. For example, energy cooperatives fulfill a similar mission and have only very distantly to do with banks (if that is the case at all).
As a house or institution, you need to ask yourself to what extent you are entrenched in your banking business. What else can you offer? The answers to this question are highly dependent on the region you are in. In Tuttlingen, for example, where a lot of medical technology companies are located, you would have the opportunity to offer something very specific to these types of companies and develop an ecosystem that takes on the very challenges that the companies face.
In a canton in Switzerland where there are mainly vacation regions and where the economic value creation takes place almost exclusively, you can find your solutions specifically there. This applies equally to savings banks and cooperatives.
This means that in the future, the answer will have to be found regionally. Because only regionally can valuable answers be found to the particular specific requirements. If this is not the case, you run the risk of becoming arbitrary and then you are replaceable.
A regional bank that has developed a good answer as to how it can meet the requirements for its region with the appropriate specifications that the region brings creates a barrier of entry of sorts. For others, it is not worth offering solutions that only fit individual regions. This regionality is a strength you can and should build on.
Pre-thinking of future strategies by associations
Thinking ahead is possible in principle. However, the question arises whether forethought alone is sufficient. If one compares the economic strength of a region and the success of the regional banks located there, there should be a very strong correlation. In reality, this is only partially true. There are economically very strong regions without the banks in the region being similarly successful. On the other hand, there are successful banks in rather structurally and economically weak regions. The bank’s response in the region plays a key role in its own success.
To implement a concept or a solution, people are always a decisive factor. It is better to choose the second best option, which you achieve 100% of the time, than the best option, which you achieve only 80% of the time. A solution that people are passionate about is more beneficial to you than an objectively perceived better solution or concept that people are not convinced about. If people are not convinced, it is likely that the concept will be implemented with less passion, more resistance, and therefore inadequately. The necessary motivation and passion are missing. Consequently, the optimal solution always depends on the people of a region and their needs. Because only they themselves know what exactly they need.
Basically, it is possible to think ahead about options, you can always consider what technologies you can use or how you can integrate AI and simplify processes, for example. What ultimately makes you interesting in the long run, what makes you attractive and appealing, has to be very specific. Otherwise, it will not work sufficiently. This attractiveness ultimately decides between success and failure. This is a link back to the consolidation pressure in the regional banking sector mentioned earlier. Because it’s that nuance that can make the difference between your business being taken over or you being the one who goes ahead and takes over others if necessary. On the existence of your business, this will definitely have a decisive impact.
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Have a bright future!