No technological innovation has been able to fully replace the economic functions of banks. From our experiences with banking transformation in Germany, I don’t see widespread disruption happening today or in the foreseeable future. Right now, day-to-day relations between fintechs and banks in Germany can best be described as “complicated".
One of the most important goals is to ensure that banks hold more and higher-quality capital, and have sufficient liquid assets on hand, to be able to survive a market shock or severe economic downturn. In addition, we must push banking organizations of all sizes to ensure their compensation practices link pay to performance and do not encourage excessive risktaking.