Karel Baert knows that in 2030 banks are still, performing their main task, i.e. financing the economy. At the same time, it is absolutely clear that the sector also looks very different than it did 10 years ago, with new players, new services and very thorough digitalization.

Banks are the cornerstone of our society because they have a key role to play in the financing of the economy. They have the most thorough know-how at their disposal to perform their core task: turning savings into loans. The way banks perform their tasks, however, is different than it used to be. There are many new influences and factors at stake, such as ESG. Banks will play a fundamental role in achieving ESG goals because they will assess their financing against those goals. Do certain projects meet ESG standards? If so, they‘ll get funding. If not, they won‘t. 

Karel Baert, CEO Febelfin

Karel Baert

CEO Febelfin

Banks play an important role in the fight against anti-money laundering. The EU has strengthened its AML framework the last couple of years and consequently banks have been further enforcing their organizational requirements and have invested in automatic tools to fine-tune the detection of suspicious transactions. Banks thus play the role of gatekeeper and need to exclude criminals from accessing the financial system. If they fail to fulfill this role, they will be sanctioned. On the one hand banks are thus being asked by governments to intensify their AML controls, but on the other hand they receive a lot of criticism as some organizations or persons face difficulties opening bank accounts and can’t start or set up their business or economic activity.

But society can’t have it both ways. The financial sector is of course willing to help the government in fulfilling this important societal role, but it is impossible to eliminate some of the consequences of this gatekeeper role. We have to screen all clients before giving them access to the banks’ financial services, but this means that some might not meet the high AML standards that have been set by European policy makers. A solution for these actors is of course to apply for basic banking services that exist in Belgium (for consumers and for companies as well). 

Not only have the services changed, but also the banking landscape itself. New players have emerged, there have been alliances and consolidations, and the range of services offered by banks is constantly expanding, while banks also closed numerous branch offices over the past few years due to the digitization in the financial sector. Banks are increasingly profiling themselves in processes from completely different sectors. They do not only offer financial transactions but go further and constantly test their limits. 

Reliability

The major advantage that banks can bring to the table in this new way of working is their reliability. The public still considers banks to be a safe haven, for example regarding their data and all precautions regarding cybersecurity. This remains a very strong asset for the banking sector. For some technology players, for example, it might be much more difficult to gain this trust. That is also why there is only a small minority of them who have fully entered the market of classic banking services: it is and remains a complex business with many legal obligations. At the same time, technological changes have also forced traditional banks to firmly adapt their business plans. Some have done so very well and are now best in class when it comes to digital customer experiences. 

The commoditization of many banking services and the arrival of new players has also put severe pressure on fees for certain services. Consumers no longer want to pay for some services because they have the impression that they are without cost. Which, of course, is an illusion in practically all cases. 

Crypto

Thanks to the popularity of digital coins, the financial sector has embraced the Distributed Ledger Technology, like blockchain, and it has actively experimented with it. It is now a common technology in the banking world. Banks have created their own coins or developed smart contract applications. A true breakthrough of crypto assets can only occur when there is level playing field between the traditional banking sector, which is heavily regulated, and the crypto sector, which is much less regulated. After all, a non-negotiable condition for financial products and institutions is that the stability of the financial system must always be guaranteed. Regulation must hence still be developed that aligns the crypto world with this precondition.

War for talent

I already mentioned that banks offer more and broader services, but they do so with fewer people. The type of profiles have  also changed. The need for specialists in AI or big data is still very high, but the war for talent which  today is still in the forefront, has subsided somewhat in 2030, given the economic context. In addition, outsourcing and internationalization of the workforce have become commonplace at all levels. And finally, although fewer people work in the sector, their diversity is greater than ever.

About the interviewee


Karel Baert (62) holds a law degree and a degree in financial management from the KULeuven. Soon afterwards he moved to Deutsche Bank where he stayed for ten years, holding management positions in corporate and retail banking in Belgium and Germany. Then it was off to bpost Bank and the executive search firm Egon Zehnder, where he spent two decades serving financial services clients in Belgium and abroad. Since April 2020, Baert has been CEO of Febelfin, the Belgian financial sector federation.

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30 Voices on 2030: The new reality for financial services

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