The German Banking Sector: Competition, Consolidation & Contentment
9 Pages Posted: 3 Apr 2010
Date Written: August 1, 2006
The German banking sector is undergoing tremendous changes. Its’ time-tested three-pillar model has come under fire from with-in and with-out. On the one hand, both inter- as well as intra-sector rivalry is increasing. On the other hand, the European Union is forcing the government to liberalize the market for financial services and has removed the state guarantees for the public sector banks. Yet further, the threat of entry by foreign banks has increased on account of the globalization and the extension of the European Union.
German banks are therefore under tremendous pressure to perform even better. Retail customers, who were looked down upon by many “big banks” are suddenly being wooed by all and sundry. The business is full of competition and the pressure to consolidate obvious. In this scenario, it is natural that German banks are today faced with the need to get innovative ideas to retain and extend their customer base while trying to increase profitability. This paper provides a background overview over these developments.
Keywords: Germany, Banking Sector, Innovation
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