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Part II From Classic Business Models to a Customer-Centred Banking Architecture

3. What Now for Banks?

In the previous section the thought traps of the classic understanding of banking services were discussed. The USPs of innovative providers of financial services in the digital age were also made clear. It is therefore high time for banks that have been successful until now to ask themselves how their business models can be transformed in the future. Are the existing business models still suitable? What instruments can banks use in order to successfully manage the metamorphosis of their business models?

First of all, the framework for the necessary changes must be built. Therefore we shall address the impact of the information or network age—as the key trigger of the pressure to transform. While Part I focussed on current trends, it will be now be shown—following on from that—that the current developments are not merely “hype”, but instead that much more profound forces of change are at work. In the foreground is no longer the question of “whether”, but of “how” individual banks can shape this change. The central architectural framework elements for presentday business models will be explained. This includes an examination of the concepts of “bank” and “financial intermediation”, as well as essential framework conditions under which previous business models have developed.

The key question then is how the business models can be transformed in such a manner that a bank's right to exist is confirmed—also by the markets—by the satisfaction of effective customer needs with attractive price/performance configurations, thus leading to a win-win situation: satisfied customer needs and successful banking in the digital age. The necessary management “tools” will be presented, at first prior to the information/network age and then with the necessary modifications for the digital age. Following an overall overview of the spectrum of the “toolbox” for shaping business models, the individual components—strategy, structure and culture, as well as the business models as a combination—will be presented.

It will become clear that there will be winners and losers and that the line of separation in the next few years will run along the innovative power of individual banks. The findings of this section will form the conceptual “toolbox” for the transformation of banks and for the development of future-viable business models.

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