Saving banks – corporate strategy

For several years now, the financial sector has been undergoing a transformation which no financial institution – regardless of its specific corporate strategy – can sidestep.

What challenges do savings banks need to solve today to remain relevant for customers in the long term?

At first, the dramatic rise in interest rates on the money and capital markets eased the situation as deposit margins made a comeback. However, increasing competitive pressure is now gradually leading to rising interest rates on existing deposits, too.

In addition, the economic downturn, high geopolitical uncertainty and continued high inflation are putting a damper on new lending business and causing costs to rise. Limited capital resources are further exacerbating this situation.

At the same time, banks need to implement increased regulatory requirements (e.g. Basel IV), delve into the megatrend of sustainability and its implications for the institution (e.g. transformation financing, pricing), and continue to push digitalization (e.g. use of AI). All this is happening at a time when qualified employees are increasingly sought after.

Challenges that savings banks need to navigate today

Rise in interest rates & competitive pressure

At first, the rise in interest rates on the money and capital markets heralded a comeback of deposit margins. However, increasing competitive pressure is now gradually leading to rising interest rates on existing deposits.

Economic downturn & geopolitical uncertainty

Weaknesses in the economy, high geopolitical uncertainty and continued high inflation are hampering new lending business and driving up costs.

Profit pools

Only a few profitable business areas - securing existing and developing new profit pools.

Megatrends

Megatrends such as digitalisation, sustainability and skills shortages are impacting the business model.

Questions that savings banks need to answer today

With limited time and financial resources, numerous questions arise:

How do you stay relevant for current and potential customers in the long term?

What challenges should be tackled, with what intensity and in what order? And what is the savings bank’s target picture for the next five to ten years?

How are different business areas weighed against each other?

How do the respective substrategies go together and are the goals translated into an integrated plan?

What risk appetite fits the bank?

How can synergies be used when addressing challenges?

To what extent can the bank benefit from external (network) solutions?

How can a common goal be communicated to employees and potential applicants?

Each institution and each network partner must answer these questions for themselves and clearly formulate a corporate strategy as a “common North Star” – subject to regular review.

Our solution for drawing up a sustainable corporate strategy for savings banks

Defining the strategic target picture

Based on the individual starting point, we define the strategic target picture of the savings bank by taking into account current trends, economic conditions and network standards as well as the zeb target picture model for a well-founded assessment of specific income and efficiency potential. We use state-of-the-art methods such as Eigenland® and Design Thinking.

Implementing the strategy

The breadth and depth of the required solution specifies the focus of the further strategy work, which builds on the overarching strategy. It can involve individual areas such as human resources or sustainability, or it can include the creation of a “development plan” with areas of action to achieve the strategic target picture, or even a complete, multi-year program to transform the entire institution.

Monitoring success

A successful strategy needs suitable key figures and metrics to allow for monitoring the desired goals. It also requires reporting to accompany the strategy implementation.
zeb’s experienced consultants support savings banks, associations and network partners in all steps of the strategy work – from ideation to practical implementation.