Digitization as a strategic solution

Private construction financing is a traditional and central pillar of the business model of German banks and Sparkassen. However, the persistently low level of interest rates combined with a flat yield curve has led to an erosion of interest margins in recent years and reduced the earnings of this former cash cow to an extent that in some cases threatens the very existence of the business.

The positive development of private construction activity among Germans, which is supported by the low level of interest rates and the robust situation on the labor market, can no longer compensate for these burdens on earnings, despite the associated increase in lending volumes.

A key challenge in the private mortgage business is the increasing affinity of broad sections of the population for digital information and transaction channels. Today’s – and even more tomorrow’s – bank customers expect their bank to provide a comprehensive and end-to-end range of services across all digital channels. Multi-channel excellence is becoming an important success factor for banks and savings banks.

Find out more in our article Private Construction Financing – Digitization as a Strategic Solution for “die Bank magazine.

(The article is in German.)