Trends in the financial sector

Client needs are in flux and technological progress is accelerating. Strategy 2026 sees VP Bank refine its business model so it can benefit from these developments.

On average, the populations of industrialised nations are getting steadily older. A significant proportion of assets and/or decision-making responsibility for asset-related matters will transfer to generation X and millennials over the next few years. They are the first generations to be termed “digital natives”.

Digital natives are used to information being available near-instantly and to receiving individual offers tailored to them, 24/7. As a result, even today, banks need to be able to use open architecture so they can quickly customise products and services to client’s needs and put them at their disposal.

High-net-worth clients are becoming more international, with a correspondingly increase in the number of bank relationships in various countries. In turn, this will also see demand for cross-border wealth management services rise. This is being triggered by geopolitical changes or, rather, the quest for stability and security in asset-related matters.

The future generation will also have a marked need for personal advice. In particular, this will take the form of “navigation support” to address the increased complexity and range of options within financial services, greater complexity in terms of wealth management needs, the behaviour of international clients and, increasingly, the relevance of the time required for their own wealth management.

To find out more about the contribution that VP Bank is making to the sustainable development of the financial sector, please see the chapter “Commitment to sustainability”. 

At the same time, the digital transformation continues to pick up the pace. The value of data will continue to grow with the use of data analytics and artificial intelligence, which leads to customised offerings on the client side and to accelerated internal processes. In parallel to this, data security and cyber security measures are growing in importance as hacker attacks are becoming increasingly sophisticated.

Cloud computing will play an increasingly central role in the banking sector, and not only for these security aspects: specifically, it enables smaller and mid-size banks, in particular, which do not undertake a large amount of development work themselves, to access the relevant standard technologies.

Distributed ledger technologies (blockchain) will continue to gain a foothold and will assume a key role in certain application areas. VP Bank picked up on this trend at an early stage with its digital asset offering and will continue to expand this range on an ongoing basis.

New technologies do not just facilitate the creation of new services: they also disrupt existing processes and value chains. While banks still currently bear a resemblance to universal banks with a comprehensive range of products and services, they will specialise over the next few years, at the same time as integrating complementary partner benefits. In this respect, it is to be assumed that banks will enter into collaborations and take on shareholdings to develop a broad range of products and services as part of complementary solutions for clients.

This development is known as “open banking”. VP Bank laid crucial foundations in this vein in 2022 on which it can build to successively expand its wealth management range with complementary third-party services.

This could lead to standard services being outsourced to specialist providers which, in turn, generates economies of scale. This can also give rise to strategic partnerships focused on market cultivation and product creation alike.

The financial industry is already very heavily regulated at present and the barriers to entry are high. At the same time, this also demands a further increase in the quality of client protection, data protection and tax transparency. Companies like fintechs or bigtechs will need to get to grips with the relevant regulations.

Providing regulation-compliant advice and a range of services based on this will keep becoming ever more complex. As a result, it is likely that institutes will become increasingly specialised. At one and the same time, this specialisation will go hand-in-­­hand with enhanced collaboration with partners and with the creation of ecosystems.