The Limited Times

Now you can see non-English news...

Banks under increasing pressure: "This is excellent for customers"

2023-08-20T07:08:19.470Z

Highlights: The turnaround in interest rates makes it attractive again for banks to attract many customers with savings deposits. 141 out of 738 financial institutions still have zero interest rates on overnight money in Germany. The banking business is thus facing a turning point: the battle for customers has begun. According to a study by the consulting firm EY, the willingness of wealthy clientsto change providers has reached a new high. Younger customers are also more willing to change providers, according to a report by Wirtschaftswoche.



Status: 20.08.2023, 09:00 a.m.

By: Lisa Mayerhofer

CommentsShare

The turnaround in interest rates makes it attractive again for banks to attract many customers with savings deposits. (Symbolic image) © Christin Klose/dpa-tmn

The turnaround in interest rates makes it attractive again for banks to attract many customers with savings deposits. In this way, the offers for consumers are getting better and better – those who hesitate could soon lose out.

Munich – The turnaround in interest rates is here – even if many banks in Germany are still reacting hesitantly to this change. In doing so, they are threatened with pressure on all sides. This is because many banks are now constantly improving their offerings – and according to a report, international heavyweights are also entering the market. The battle for customers could lead to increasingly attractive offers for consumers.

Better interest rate offers for customers: Banks take their time

However, savers are still left empty-handed at one in five banks in Germany – and this is still more than a year after the start of the rapid turnaround in interest rates in the euro area. In an evaluation by the comparison portal Verivox from the end of July, 141 out of 738 financial institutions still have zero interest rates on overnight money.

At the same time, the unprecedented turnaround in interest rates has made savings attractive again for banks and savings banks. More and more institutions are soliciting money with ever new interest rate offers. According to the Verivox calculation, the average interest rate of nationwide overnight money offers is 1.31 percent at the end of July. A year ago, interest rates were only just above zero: at 0.05 percent at the beginning of August 2022. Fixed-term deposits with a two-year term currently yield an average of 2.96 percent at nationwide active banks. This is almost four times as much as at the beginning of August 2022 (0.82 percent).

Nevertheless, banks are taking more time than in the past to pass on the ECB's interest rate hikes to savers, as an analysis by the Bundesbank shows. Consumer advocates from several federal states recently called on savings banks to "accept and pay interest on consumer deposits in the amount of the statutory deposit insurance".

More and more competition for banks in Germany

This is because savings banks and cooperative banks in particular are not yet following the turnaround in interest rates by passing on higher interest rate offers to their customers. However, this could soon take revenge: According to a study by the consulting firm EY, the willingness of wealthy clientsto change providers has reached a new high. Younger customers are also more willing to change.

And in doing so, the banks are threatened with new competition: Not only are direct banks such as ING increasingly catching customers with better interest rate offers. International heavyweights are also pushing into the German market. For example, the major French bank BNP started in Germany with a subsidiary.

And in Berlin, a team of JP bankers is working on an online bank for the European Union, reports Wirtschaftswoche. JP Morgan is the largest bank in the world and has so far only been active in investment banking and business with corporations and the super-rich. Now, however, a new offer from the major US bank is to be launched: an online bank for private customers. Probably with the name Chase, since under this brand an online institute in Great Britain has already been fielded against competitors, explains Wirtschaftswoche.

The banking business is thus facing a turning point: the battle for customers has begun. "This is excellent for customers, banking could become even cheaper," Volker Brühl, managing director of the Center for Financial Studies at Goethe University Frankfurt, told the magazine.

With material from dpa

Source: merkur

All news articles on 2023-08-20

You may like

Trends 24h

News/Politics 2024-02-21T06:41:15.236Z

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.