assessment of licence applications – and this explicitly also addresses the question of fintech credit institution licence applications. i urge banks and fintechs to use the consultation phase constructively. 3 / 6 bis central bankers'speeches 5. banks and savings banks must become more efficient i come now to the cost side and to the challenge of compensating for declining income through greater efficiency. this brings me to my fourth theory : german credit institutions could provide their services more efficiently. once again, i would draw your attention to the low - interest - rate survey, whose findings suggest that small and medium - sized german institutions are expecting their cost - income ratio to increase. unfortunately, this puts german credit institutions at the bottom of the european league. if the cost - income ratio remains poor because of a failure to significantly bring down administrative costs, then more has to be done. an optimist would therefore hope that the only reason why the numbers remain unsatisfactory is that the banks and savings banks are busy investing in things such as new it infrastructure, better risk management systems and more efficient processes. i fully support those institutions which are doing just that, but i have to say that there are still many institutions which are not. and i am talking here about all three pillars of the german banking system, although perhaps not to the same extent in each case. we point out these differences in our conversations with the sector associations, and i hope that what we tell them sinks in, because differences can definitely be a sign that more has to be done in some quarters than in others. banks and savings banks will have to become even more efficient, and they will have to do so in a new, tougher regulatory environment. what i am getting at here is that the regulatory framework cannot be loosened so as to allow inefficient institutions to kick structural change into the long grass. i readily admit that credit institutions incur costs because of regulation and oversight. but a bank or savings bank which cannot survive in an effective regulatory and supervisory environment needs to urgently rethink its business model. it goes without saying that adapting to the new regulatory requirements is a mammoth task, and the uncertainty surrounding the regulatory reforms which have yet to be put in place is clearly a problem. what will basel iii bring with it, and what will it mean for banks in the eu? this is why we are making every effort to complete basel iii without creating excessive burdens. once that has been done, basel iii should,

customer needs are not automatically better served. 7. conclusions ladies and gentlemen, an animal that tries to resist evolutionary change because it is not congenial risks becoming another animal ’ s dinner. similarly, technological progress changes value creation in the banking sector. there is no escaping this simple truth. adapt or die. it is undeniable that monetary policy and regulation are currently having major side effects on the banking sector, but we cannot allow these side effects to blind us to the uncomfortable fact that it is precisely the new, creative and innovative forces that are destroying existing structures in the banking sector. every bank and every savings bank must ask itself if it wants to be part of the creative force, part of the new structures, or part of a ruined structure. i dare to suggest that most of you wish to belong to the first group. do you believe that it is possible without taking courageous decisions? without risky decisions? or without unpopular decisions? i do not. creative decisions presuppose creative questions : questions which show the world in a new light. in germany ’ s banking landscape, the questions which are being asked are all too often framed in a decades - old mould of thinking. so, to misquote title of a song by german singer ina deter, perhaps the country needs new bankers? essentially, it does, because you will not be able to lead your institutions to a new era with the old thinking. banks are becoming service providers with banking licences ; account holders and bank customers are becoming “ users ” who require a broad spectrum of flexible financial services. so, yes, a new world needs new bankers, or at least experienced bankers who have the courage to take innovative decisions. my challenge to the sector is therefore to perform a mental demolition of established institutions wherever necessary and to rebuild them on green - field sites. today ’ s banks will only be successful tomorrow if they have enough new bankers, or take new decisions. i will be pleased to take your questions and hear your comments. 5 / 6 bis central bankers'speeches 1 the findings of the low - interest - rate survey suggest that two - thirds of institutions are expecting competition from other banks to increase, and no fewer than 85 % of them expect greater competition from fintech companies. 6 / 6 bis central bankers'speeches