Will Fresh-Banking Survive In Spain?


This article is about Change. About a change that will, or will not happen. Resistance is one of the main players.

Spain is changing rapidly and so is banking in Spain. There is already more competition due to the arrival of internet banking a few years ago (Bank Inter). But so far the competition has been dominated by local banks. Just think how it was fifteen years ago:

".. bankers in this country where accustomed to gather each month around a well served dish to unite their strategies and to renovate their secret pact. «first command: do not steal clients from your friend. Second: do not raise interest rates without previous noticing. Third: do not launch products without communicating to the competition...» Someone mentioned Competition? That was exactly what didn't exist in the banking sector."

This is a piece of the dialogue from an interview with El Mundo and the presidents of the two largest banks in Spain in 1996 -- Ybarra, the "cricket" from Santander and Botin, the basque' (BBVA) "ant" -- (elmundo.es/papel/hemeroteca/1996/12/09/economia/188863.html).
As said, that was fifteen years ago.

But after the introduction of the internet, new globalization trends seems to add more and new competition.

ING (Direct) has introduced a new and offensive campaign called "Fresh banking." Fresh banking refers to an approach where -- amongst other things, like more transparency -- the traditional commission are removed. This is already a best-practice in the Netherlands -- where the head-office of ING is located -- but until today "not-done" in Spain, where a single transfer to another account at the same bank will cost you one euro. Without exception.

Having experienced this you may think: well this might trigger just another competitive revolution in the Spanish banking sector.

Perhaps it will.

But banking -- and not only investment banking -- is not without risks.
ING recently joined Formula Sponsorship and covers the Renault team. Renault however is no longer the Spanish favorite as Fernando Alonso switched to McLaren this year. McLaren is also sponsored by Santander, the largest Bank in Spain.

In this way, ING has achieved to extend their presence in Spain, because F1 is following soccer as one of the most favorite sports. It is however not very likely that Renault will win the F1 this year as Fernando is the favorite at the moment and Renault pilots are not amongst the favorites.

Like the F1 competition of this year, you can only speculate about the final (outcome) of this (banking) game; would -- like in the eighties -- the Spanish banks gather again on a monthly bases in order to align their mutual strategy against such a foreign intruder?

© 2007 Hans Bool

Hans Bool writes articles about management, culture and change. If you are interested to read or experience more about these topics have a look at our site Astor White and or sign-up for our newsletter.

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