Four new, urgent bank models fit for winning in the digital economy…and beyond

As a youngster, former U.S. President Ronald Reagan couldn’t decide what type of shoes he wanted. Unwilling to wait any longer for an answer, the local cobbler ended up giving Reagan one square-toed and one round-toed shoe. Reagan later commented, “I learned right there and then that if you don’t make your own decisions, someone else will make them for you.”

Today’s retail and commercial banks also find themselves in need of “new shoes”. Their old business model is wearing thin and is unfit for a digital world. It’s being eroded by inhospitable macroeconomics, new de-risking and open banking regulations, fintech growth, consumer behavior increasingly favoring non-traditional players, and other market-specific drivers. If banks fail to make an explicit decision on evolution of their business model, other more decisive actors will decide for them.

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