‘The banks will disappear if they do not act!’ said Jürgen Ingels, speaking at the Baltic M&A and Private Equity Forum in Riga. Ingels became well-known as the founder of Clear2Pay, which was sold to FIS for EUR 400 million.
Ingels foresees large internal shocks for banks, and considerable losses in the banking market in the near future. In his view, banks employ too many people and bank employees have not adjusted to the new situation. ‘First, the banks need to get rid of their large numbers of people; and secondly, they also need to replace some of their existing employees,’ said Ingels.
According to Ingels, the problem lies in outdated skills – when he and his generation graduated from university a few decades ago, they were stamped as ‘Good for 40 years!’ However, current university graduates have to accept the label of ‘Good for 10 years!’ and soon, they will not even have that much time. In the meantime, they have to learn new technological skills during the course of their work. ‘The problem with the banks is that they still have a lot of people running around who were given an expiry date of 40 years.’
At the same time, Ingels says that the financial sector offers much greater business opportunities today than it did 16 years ago, when he founded Clear2Pay. Today, we can use cheaper cloud services, software development has become much more flexible and is based much more on customer feedback, and additionally, the product-centred approach has been replaced with a customer focus.
A big challenge for the banks is to start thinking in real time, in order to satisfy their consumers’ needs within seconds. ‘At present, the banking sector does not work in real time,’ said Ingels.
Jürgen Ingels founded the payment software company Clear2Pay 16 years ago; two years ago, he sold it to financial technology giant FIS for a price of EUR 400 million. At the time of the sale, the company had 1200 employees in 14 countries.
Ingels was speaking at the Baltic M&A and Private Equity Forum in Riga, which brought together some 200 market players. The Forum was organised by Äripäev, Dienas bizness and Verslo þinios, the law firm Sorainen and Superia Corporate Finance, in cooperation with the Estonian, Latvian and Lithuanian Private Equity and Venture Capital Associations.