How will retail banks in Luxembourg compete with other players in terms of digital services ?

Abstract

Digitization impacts every industry, whether directly or indirectly, and the adaptation to new technologies is a challenge for every kind of company. Banks are also confronted to those issues and have to adapt to the needs of customers and to the competition while improving their costs’ efficiency and remaining compliant with the increasing regulations. The role of a consulting company as Deloitte is to provide help to the banks in order to face those challenges. However, to be efficient, Deloitte has to understand all the involved elements that impact the market. For the second time, Deloitte Tax & Consulting Luxembourg carried out the “Deloitte Digital Banking Benchmark”, an assessment of the level of digital services offered by the retail banks in Luxembourg. The company accepted to link this internal project to this thesis, in order to improve the observations and the results of the “Deloitte Digital Banking Benchmark” with an academic method, scholar litterature and another vision of the problem of digitization. This project-thesis relates to the question “how will retail banks in Luxembourg compete with other players in terms of digital services”. Firstly, it takes into account the technological evolution that has changed the way people carry out their banking activities, as well as the elements defining the relationship between clients and their bank nowadays. Then, it focuses on the particularities of the Luxembourgish market, such as the historical background, the structure of the labor market, the current state of digitization, the policies implemented by the authorities … The thesis takes into account the partnerships that are achievable for banks as well as the possible rivalries that could hit the market in the future. The conclusion of the thesis is divided in two parts, the first one relates on a thought for the ethical problems triggered by the increasing digitization in the banking industry. The second one takes into account all the elements that have been observed and analysed in the development steps in order to suggest a series of recommendations. Those recommendations are aimed at improving the digital activities of Luxembourgish retail banks, compared to the ones of retail banks from border countries and of non-traditional entrants.