Banks Cannot Own Every Touchpoint: Deutsche Bank on Staying Competitive

Quick Summary

Deutsche Bank''s Tsvetanka Nankova sets out three requirements for transaction banks facing agile new entrants: ruthlessly prioritise a small number of strategic bets, act more like a tech company, and defend the two areas where banks still hold a genuine edge, balance sheet and risk intermediation plus execution at scale.

How has the competitive landscape changed?

The landscape has become considerably more complex over the past few years, with multiple new entrants arriving in the industry. Nankova treats that as a positive, because competition drives innovation, and she is clear that traditional peers are not standing still either: nobody is asleep. Everyone is working to stay ahead of the game and, ultimately, to stay in business. The shift she describes is less about who the competitors are than about what banks must now accept.

Why must banks give up owning every client touchpoint?

The mindset change, in her words, is understanding that a bank cannot own every single touchpoint with its clients going forward. That forces a discipline around strategic bets, which are costly and demand time and focus. Historically, financial institutions saw something new and slightly glamorous and entered businesses that added tactical value in the short term without being strategic to the institution. Ruthless prioritisation of the areas where a bank has a real competitive advantage is now, she argues, critical.

What does acting more like a tech company mean?

Many of the new entrants are monoline service providers, and their agility is a structural advantage over an institution carrying Deutsche Bank''s history and complexity. Responding swiftly is the capability to build, across three moving targets:

• Geopolitical and economic shifts that change the shape of flows with little notice.
• Client needs, which now move at the pace of the digital services clients use elsewhere.
• Regulatory expectations, which keep changing alongside both.

Where banks retain the edge is in the areas that are genuinely hard to replicate. A regulated balance sheet and risk intermediation is something Nankova believes new entrants will struggle to scale, and it matters most in times of turmoil, when clients care less about how fancy an ecosystem looks and far more about who provides the liquidity and the backing behind their obligations. The second is execution at scale, underpinned by rich operational data and the new technologies that can now be applied to it.

FF NEWS TAKE:

Nankova is describing a bank that has stopped competing on surface area, which is a harder discipline than it sounds when every business line can make a case for itself. The balance sheet argument is the honest one: in a stress event, agility is not what a treasurer calls for. The open question is whether incumbents can prioritise ruthlessly enough while the good years hold.