German banks fear competition from U.S. digital companies: survey

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BERLIN, Oct. 14 (Xinhua) -- German banks feared competition from U.S. digital companies like Facebook, Amazon and Apple, according to a survey among German banks published by the consulting firm Ernst & Young (EY) on Monday.

The survey found that 69 percent of the German bank managers expected increasing competition from U.S. digital companies.

U.S. digital companies had "everything they need to make life difficult for traditional banks," Thomas Griess, EY Germany financial services managing partner, stressed. For example, with the mobile payment solutions, the American companies threaten to "take direct contact with younger customers out of the hands of banks."

According to Griess, "sooner or later" mobile payment for example via smartphones would be established in Germany. "And if it is the U.S. digital corporations that are responsible for these payment flows, the banks will lose a great deal of ground in mass business."

"The banks' concerns are justified. They should urgently invest in innovative products," Robert Melnyk, EY financial services office performance improvement leader, said.

However, just 23 percent of German banks were currently working "intensively" on introducing new products, according to the survey.

"The situation in the German banking sector has worsened considerably in recent months," Melnyk said.

To counteract the low profit trend, every sixth bank planned to increase fees for private customers, and every tenth bank wanted to charge more for money transfers, the survey showed.

On the other hand, many German banks were trying to reduce personnel costs. 22 percent of credit institutions surveyed want to reduce the number of employees this year. Especially, jobs with direct customer contact would be affected.

In addition, more jobs would be needed in IT or risk management, the survey found, as there is a huge demand for "highly skilled professionals," according to Melnyk. Enditem

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