I don’t have much experience with German banks, I only work with N26 which is a purely online bank. In general, German banks are very classic, they require you to communicate in German and pay a small fee for checking accounts. Of the large banks, the most international is Deutsche Bank.
In general, German banks are a more complicated situation in terms of profitability than their counterparts in other EU countries due to very low interest rates (CNBC, 2019). One of the main problems is the proliferation of small savings banks, there are about 400 savings banks in the country known as Sparkassen, which represent 15 percent of the total assets of the banking sector (Internationalbanker, 2019), these boxes savings present a personalized service, neighborhood, which is not free of cost.
McKensey in a 2019 report suggests the following pillars to increase profitability:
- Development of a customer approach. There should be a key strategic change away from products and towards customers in the first place. At the same time, banks should cut non-essential businesses, which will help reduce complexity and costs.
- Deepen data processing analytically. They must use advanced analysis and artificial intelligence to reduce costs in operations, risks and compliance.
- Switch to digital banking. Digitization can help banks move away from a physical distribution model and significantly improve productivity.