-
Important news
-
News
-
Shenzhen
-
China
-
World
-
Opinion
-
Sports
-
Kaleidoscope
-
Photo Highlights
-
Business
-
Markets
-
Business/Markets
-
World Economy
-
Speak Shenzhen
-
Leisure Highlights
-
Culture
-
Travel
-
Entertainment
-
Digital Paper
-
In-Depth
-
Weekend
-
Lifestyle
-
Diversions
-
Movies
-
Hotels and Food
-
Special Report
-
Yes Teens!
-
News Picks
-
Tech and Science
-
Glamour
-
Campus
-
Budding Writers
-
Fun
-
Futian Today
-
Advertorial
-
CHTF Special
-
Focus
-
Guide
-
Nanshan
-
Hit Bravo
-
People
-
Person of the week
-
Majors Forum
-
Shopping
-
Investment
-
Tech and Vogue
-
Junior Journalist Program
-
Currency Focus
-
Food and Drink
-
Restaurants
-
Yearend Review
-
QINGDAO TODAY
在线翻译:
szdaily -> World Economy -> 
Over a third of banks globally may be vulnerable: McKinsey
    2019-10-24  08:53    Shenzhen Daily

Over 60 percent of the world's banks do not make their cost of capital and over a third of them may be vulnerable and are at risk, according to a survey from concultancy McKinsey & Co.


A majority of banks globally may not be economically viable because their returns on equity aren’t keeping pace with costs, McKinsey said in its annual review of the industry released earlier this week. It urged firms to take steps such as developing technology, farming out operations and bulking up through mergers ahead of a potential economic slowdown.


“We believe we’re in the late economic cycle and banks need to make bold moves now because they are not in great shape,” said Kausik Rajgopal, a senior partner at McKinsey. “In the late cycle, nobody can afford to rest on their laurels.”


The decade since the global financial crisis has seen a wave of innovation in financial services, bringing new competitors from fintech startups to giants like Apple Inc. and Alphabet Inc.’s Google. Banks have pondered whether to compete with, partner with or acquire some of these newcomers. Some established firms have sought to rebrand as technology companies, in part to attract hard-to-get talent.


McKinsey, whose clients are some of the biggest corporations in the world, consults on topics ranging from strategy and technology to mergers and acquisitions, outsourcing and stock offerings. In its report, the firm said banks risk “becoming footnotes to history” as new entrants change consumer behavior. Most recent attempts by banks to boost efficiency have been “business-as-usual,” it said.


Banks allocate just 35 percent of their information technology budgets to innovation, while fintechs spend more than 70 percent, McKinsey said. Combined with regulatory factors lowering the barrier to entry — like open banking and looser requirements for startups —  the environment is increasingly conducive for newer firms to take share from banks.


The report points to Amazon.com Inc. in the United States and Ping An in China as examples of technology firms that are capturing financial services customers. To make matters worse for the old guard, the new players tend to go after the business areas that create the highest returns at banks — credit cards, for example.


Lenders can cut costs and find funds for technology by outsourcing what McKinsey calls “non-differentiating activities,” including some trading and compliance functions. Banks “need to get much more comfortable with external partnerships and being able to leverage talent externally,” Rajgopal said.


(SD-Agencies)

深圳报业集团版权所有, 未经授权禁止复制; Copyright 2010, All Rights Reserved.
Shenzhen Daily E-mail:szdaily@szszd.com.cn