In September I visited some of the core centres of European financial integration, trying to navigate myself through some pretty technical discussions on how EU financial legislation will change the routines of the Nordic financial institutions and its employees.
GLOBALIZATION AND LOW INTEREST RATES
The panel discussion on global disruption at the annual summit of the European banking federation(EBF) stated that what we are seeing in Europe today is an increased focus on protectionism and lower trade growth. In addition, the EU is faced with to the inevitable question of Brexit – sending the British pound to a new 31-year low.
European banks today have seen revenues down by both stagnating global trade and reduced deal making. Low or even negative interest rates reflects some of the challenges of globalization. Huge European banks are cutting down on staff – German Commerzbank announced last week a plan to cut 20 percent of its workforce with hope it will enable it to deliver a return on equity of 6 percent by 2020. Belgium bank ING is to cut 7000 jobs as it continues to struggle on the global market. The latest development with Deutche Bank show that European markets are heavily integrated. The German bank is said to set to advance on 1,000 planned job cuts according to Bloomberg Markets. In a sector trying to build up trust– the case of Deutche Bank is another blow.
EU financial regulation requires staff to interpret and integrate new demands – also known as compliance. One stated that he has gone from being a banker to being a surveillance officer. Is this changing the DNA of employees in our sector? NFU highlighted to European decision makers the importance of proportionality. In the Nordic region we have smaller banks that will have a hard time complying with new requirements from European financial authorities. What specific effect the regulations have on everyday work life will be closer evaluated in NFU’s research project “Nordic implementation of the EU financial rules” lead by Copenhagen Business School. We are eager to follow this research and present it to you by the end of June in 2017.
Start-ups such as Dunq and Fentury are new apps that will lead the digital disruption in the banking industry. Young, technical skilled employees are set out to conquer new markets with their new attitude towards work – informal and engaging work environment that allows the employees to be a vital part of businesses strategies and goals. Employee involvement is a key concept.
Internal motivation relies on the engagement of employees in the decision making processes, the work environment and the flexibility of human resource policies. This reminds me a lot about the basics principles in the Nordic collective agreements. Can we learn from each other and promote employees as the company’s most valuable assets?
Leaving the desk for a week definitely opens your eyes and ears for new input. What I see is a rocky road ahead for European financial institutions. The path ahead will not be easy. What NFU can do as a voice in the debate is to put forward the voice of employees and underline the importance of involving them when the goal of the European financial sector is long-term sustainable growth.
That is why NFU will continue to monitor and give input to European legislators from the Nordic perspective. As an integrated part of the European internal market we need to be aware of the tides surrounding us. As one speaker brilliantly noted:
“You can have the most robust ship possible, but if the tides and storms are strong enough you will still be washed ashore”