What can we expect for banking in 2015?

Transcript

2014 was a year in which regulatory pressures caused existential threats to much of the financial services industry, with new liquidity rules putting more of a demand on banks. Still, whether you see regulators as Lombard Street’s wingmen, Che Guevara’s in suits, we have a new banking landscape. World Finance speaks to Jean Lassignardie, Global Financial Services Chief Sales and Marketing Officer for Capgemini, about banking in 2015.

World Finance: Well Jean, how much more can we anticipate regulators getting involved, or can we assume that they’ve had enough leaning on the industry for now?
Jean Lassignardie: As you rightly pointed out, after the financial crisis in 2008, there has been a significant regulatory impact on the financial institutions. Our prediction is that we enter into a new era of regulation, that all financial services institutions will have to cope with.

I think on all different aspects, like customer protection, increased stability, product operation, there will be a whole set of new impacts of this next era of regulation.

World Finance: Internally, how much do you think banks need to rethink their core processes?
Jean Lassignardie: Simplification is obviously one of the other major trends and predictions that we have in 2015. Decreasing costs, I think banks have squeezed as much as they could thanks to 2018, they have reached a limit of standard squeezing costs. It needs now to be simplified, their operation.

Simplification is obviously one of the other major trends and predictions that we have in 2015

World Finance: How reliant is the banking sector on the more general recovery of the EU?
Jean Lassignardie: The banking sector played a critical role to fund the economy, to really redefine the day in the life of the customers. They’re all in every sector there. I think we have very strong institutions in each and every country. They have just demonstrated that they have been able to wave the crisis. Overall, it had a critical role in the recovery of the EU.

World Finance: We’re hearing more and more criticism from financial service industry players that the ECB needs to stop with this rock-bottom interest rate nonsense. What do you make of that?
Jean Lassignardie: The level of interest rate is putting an additional pressure on the banking P&L, pushing the bank and the financial services institutions to truly look for additional services, additional easy to interact with for the clients. So to a certain extent, it’s good for the clients, but of course pressure for the banks themselves.

World Finance: Capgemini is a great proponent of e-banking. How transformative can this be in 2015?
Jean Lassignardie: E-banking is becoming absolutely vital. Banks reinventing themselves and the customer experience through e and mobile.

World Finance: So do you foresee retail banks therefore cutting more jobs?
Jean Lassignardie: It’s more transforming those jobs. There is of course what is called the only channel, which is the combination of the historical, for example, network of branches, that are truly, completely transformed, together with all these digital and new electronic channels, and mobile channels.

Yes, it’s true, it’s a significant transformation, not to say a reinvention. So there is a whole set of new jobs and in each and every large institution you can see transformation and a lot of programmes to really help their people to truly get to the next level.

Regulation of course if increasing the pressure towards customer security

World Finance: Well like ant industry, banking relies on how it’s perceived. Surely with the increased regulatory tightening, severe cost cuts, and new processes, customer expectations are going to have to change fast. So do you expect this to be the case in 2015?
Jean Lassignardie: Absolutely. As you mentioned, the words customer expectation, customer experience, this is now truly the name of what matters, what really the banks are focusing on, and what the customers are truly taking to account to decide, where do they want to bank, with who do they want to bank, who they would recommend. So that’s absolutely vital.

Regulation of course if increasing the pressure towards customer security, making sure that all the protection, the data protection, all these aspects are truly taken into account. Definitely in 2015, prediction I should say is quite easy, as we’ll see an increased focus on those aspects.

World Finance: Finally, the last few years have seen a period of banker bashing. Do you think 2015 will be any different?
Jean Lassignardie: I understand why there has been some bashing. We all understand that there have been some questions here and there, but frankly the banking and the large banks do deserve to be much more understood and appreciated by everybody.

There have been a lot of efforts to truly stay in touch with their clients, make sure that they continue to be relevant, provide with services, security, everywhere you can find that. Sometimes we don’t recognise that, we don’t appreciate that when you need money and you have your credit card with you, somewhere in the world your bank is behind that.

So I hope that what you call banking bashing will be significantly lower in 2015. I know banks are making a lot of effort for that, and I hope they will be very successful.