Local banks are losing their appeal: entrepreneurs complain about centralization

Local banks are losing their appeal: entrepreneurs complain about centralization

The current centralization of banking services could have serious consequences for many entrepreneurs, as the experiences of the northern German entrepreneur Sebastian R. make clear. Loud Craft sheet Sebastian stayed at his local Volksbank in order to benefit from the short decision-making processes and flexibility. But recently he saw those advantages threatened by a new, centralized structure.

When he needed a temporary credit limit increase of 15,000 euros, this was initially approved, but another problem arose: two direct debits totaling almost 1,000 euros were not honored because his account was considered overdrawn. The reason? The bank employee who noted the loan increase did not properly reach Sebastian to clarify the terms of the approval. As a result, he realized that personal support would suffer greatly in the new structure, as the employee now looked after many customers.

Consequences of centralization

These developments highlight how centralization in the banking industry can create problems for customers. The flexibility and short decision-making processes that Sebastian R. valued at his former bank are now at risk due to the cumbersome processes of a larger bank. Sebastian is considering diversifying his banking relationships and talking to other banks to find alternative solutions.

The challenges he faces are not isolated. Loud IT financial magazine Many banks in Germany are currently carrying out projects to redesign their financial architecture. These are necessary in order to meet the increased demands on data supply and to work more efficiently.

The need for realignment

Experts such as Jana Behr and Fabian Borchers from KPMG emphasize in a white paper that a realigned finance function is necessary for banks to survive. Skilled labor shortages, cost pressures and regulatory requirements pose major challenges. However, many banks struggle to exploit the potential of the data they collect, which affects the quality of reporting. The IT infrastructures that have developed historically in many banks hinder centralization and increased efficiency in the finance function.

In Germany, banks have been trying to reorganize their finance functions for over a decade, but often without the hoped-for success. The complex systems require a gradual approach to centralization that minimizes potential risks. Continuous communication between stakeholders is considered crucial to the success of these projects.

In conclusion, it can be said that entrepreneurs, like Sebastian R., are forced to critically question their banking relationships and not to rely exclusively on one bank. Personal contacts and clear written confirmations are important elements in avoiding misunderstandings and risks in a changing banking environment.