By: John Armstrong
The Globe and Mail
April 30, 2013
Canadian banks have an enviable record for stability and performance over the past 20 years. Even into 2013, we are continuing to see remarkably good performance.
However, the next few quarters are likely to be very challenging as key forces start to impact top- and bottom-line results. These include the global headwinds we are seeing as the European economy continues to stall, slow growth in the Canadian economy and the high degree of debt among Canadian consumers, who can no longer be the growth engine for the domestic retail businesses.
While these cyclical factors present near-term challenges , more fundamental ones exist for the banking industry globally and in Canada, and it is vital that the industry start to address them.
Canadian banks have a business model in retail banking, which will not be sustainable in the future. While most industry executives would acknowledge that the world is changing, there is not a universal recognition with respect to how fast this is likely to occur. The answer is quickly , meaning that now is the time for our banks to take a leadership position in rethinking the retail bank of the future.