Finanz und Wirtschaft, April 18, 2015. PDF. Ökonomenstimme, April 20, 2015. HTML.

• Banks increasingly face competition in bread-and-butter businesses like term deposits, lending and payments.
• Two trends shape the sector’s changes: Falling trust in banks, both at the political level and by individual clients; and the rise of the internet.
• Trust has been squandered. But with cheap access to information, it also has lost importance.
• Asymmetric information in financial markets might become less of a friction. This could turn into an existential threat for banks.
• When trust is less important and technology more versatile, increasing returns to scale in the provision of financial services might be a thing of the past. And so the universal bank. New regulatory and tax regimes could foster the process of structural change.

Here are some links to background information:

• SavingGlobal provides a marketplace for term deposits. It intermediates between German savers and European banks.
• Peer-to-peer lending gains market share, as reported by The Economist (25 October 2007; March 1, 2014; December 13, 2014; see also the Wikipedia page).
• Competition in other areas rises as well, see my earlier post on cross-border money transfers.