Maurizio Primanni, CEO of the Excellence Group, was a guest at the 2022 Convention of CheBanca!
When asked what the Third Millennium Bank will be, the theme at the heart of his latest book, and – in particular – what its business model will be and whether it will give up market shares to Fintechs, Primanni replied:
“The ‘Bank of the Third Millennium’ will be very different from the bank we have known to date. To imagine it, we must pay attention to the macro phenomena that characterize the evolution of our society. I mention only a few which, however, have an impact on the banking business; the polarization of wealth increases, that is, the number of rich people increases. Gradually, the latest Credit Suisse research, released a few days ago, tells us that even in Italy we now have 4,000 people with assets exceeding $100 million, compared to around 85,000 worldwide. Then there is the issue of dismantling public welfare: we know that at a European level – in Italy in particular – there were countries with very heavy welfare, and this welfare will probably have to be dismantled over time. This means that people who previously could rely on the public administration for services such as health, social security and so on, will probably have to find other solutions. We have the hybridization of customer purchasing processes: now for the customer to buy online, buy at the physical point of sale, carry out purchasing processes that have an online scouting part, a closure at the physical point of sale, it has become indifferent regardless of the age of the customer, what used to be a constraint. So probably, here too, the bank will have to have this ability to relate digitally or physically with the customer while maintaining its proximity function. This digital development has also increased the circulation of customer data, and an important phenomenon of fraud is emerging, therefore of cyber risk, and this gives rise to further needs that will be increasingly pressing in the future.
We have the issue of sustainability, which – I would say – is an emergency that we all feel by now, and will grow more and more in the future. And it is an issue on which banks want and should play a role because through finance they affect the productive behavior of companies and consumers.
What are the paradigms on which the banking industry is moving to intercept these phenomena? Well, the first is that of expanding the offer: let’s no longer focus only on banking products, but let’s become a financial service provider, so let’s try to also offer investment services, financial advice, insurance products and insurance consultancy and so on. Then there are the more innovative paradigms, also mentioned by the Bank of Italy in a recent supervisory report; we are talking about fundamental factors that are making the bank evolve and will make it evolve in the future. I quote them: partnerships with fintechs, the open banking paradigm, i.e. the exchange of data between banks on the financial situation of customers. The Bank of Italy itself says ‘open banking today, tomorrow it will become ‘open finance’, therefore what today is done only on current account balances, tomorrow can also be done on the consistency of investments, on the insurance situation and so on. And the day after tomorrow it will become ‘open data’, i.e. sharing data also with external service providers. These elements give us the opportunity to represent what the bank of the future will be. In the book we talk about ‘platform bank’. We didn’t invent anything, Americans have been talking about ‘banking as a platform’ for a while now. In other words, the bank will increasingly be the place where the customer finds answers to all his potential needs during his life cycle, therefore not only financial needs but also life needs: work, family support, social security, risk protection and so on.
On the one hand, therefore, large banks that will increasingly use this platform paradigm, on the other smaller and more specialized banks. Specialization on target customers, we already have them, we have seen banks for small and medium enterprises; or specialization on the distribution model – banks of financial advisors. There too, attention, evolution: until yesterday financial consultancy was only involved in managing the client’s investment assets, tomorrow also credit. Because the credit chain will no longer necessarily have to go through traditional channels but it will also be possible to give credit to the customer through financial investment transactions. Think of the whole phenomenon of private equity or private debt alternative funds.
A world, therefore, that is changing but that changes in a way that greatly favors customer service. Given that I believe that the essence of the bank has always been to maintain confidentiality, to be close, to be close to the customer, this is certainly an element that benefits the industry and those who work in this industry, because there will be more and more opportunity to be useful for our customers.”
