Must read from Bloomberg on the state of Europe's incumbent financial institutions and the growth of fintech disruptors. Short summary, since the GFC the banks have had a rough go in Europe. "Since 2008, eight of Europe’s biggest banks have announced layoffs adding up to about 100,000 employees, paid $63b in legal penalties, and lost $420b in market value."
Since the late ’90s, lenders on both sides of the Atlantic have sought strength through consolidation. They became financial supermarkets, cross-selling products and services to as many clients as they could reach. Theirs was a belief system built on the promise of efficiency and growth; in the end, the regime failed to deliver either in a sustainable way. Now universal banks in Europe are unbundling. “To play the game, a bank had to be integrated,” says Clayton Christensen, a Harvard Business School professor who wrote a landmark 1997 treatise on industrial-scale disruption, The Innovator’s Dilemma. “What’s happening in their world is that it’s becoming more modular. More services can be provided by independents. Little by little, customers will move away from the old and into the new.”