Strategic Changes for Business Models in the German Retail Banking Industry in the Post Financial Crisis Era

Bachelor Thesis from the year 2010 in the subject Business economics - General, grade: 2.0, University of Cooperative Education Stuttgart, language: English, abstract: The Great Recession, as the global financial meltdown has come to be called, has
had devastating effects on the global economic landscape - particularly on the
banking industry. While the big, multinational investment banks that were at the
heart of this crisis were hit most severely, with players such as Lehman Brothers
Inc. among others disappearing from the financial landscape, retail banks -
institutions primarily engaged in the standard banking business with private
customers - also suffered considerably from the global collapse of financial
markets.1 Unlike their multinational counterparts, however, retail banks cannot rely
on profitable mergers and acquisition activities or proprietary trading to boost
income once the economy picks up again. While the challenges created by the
Great Recession for retail banks are complex, they are not the only threat to longrun
profitability. In many markets - especially in the mature western European
ones, other dark clouds appear on the horizon. To name only a few, plummeting
sales, narrowing profit margins, consumers' lack of confidence in the banking
system and operational cost problems threaten retail banks in mature markets
such as Germany.2 Postbank, a major German retail bank with a strong domestic
customer base is one of the players that have to make strategic adjustments to
cope with a changing economic landscape. But what will these strategic
adjustments be - and in which priority do they need to be undertaken? Although
literature on the financial crisis and expected changes in banking industry is
paramount, so far little attention has been given to showing how strategy in the
retail banking segment in the distinct geographic location of Germany will have to
look like for a specific player in the post financial crisis era.