Why banks matter and how they improve our lives

We can bank how we want when we want and where we want. We can make our purchases, transfer money, and check our balances on-the-go. But are traditional banks still relevant in the digital age? We spoke to Paul Wilwertz, Head of Communication at the Luxembourg Banker’s Association (ABBL) who provided insight why banks matter and shared 5 tips on how to choose your bank.

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1. There is no doubt that the banking sector impacts our economy. But with technology come new ways of handling money.

Why should we stick to our banks?

Because, when it comes to money, it comes to trust. And also, because when we speak about money, we often speak about complex situations like organising a succession or dealing with an important international project. And in complex situations people often tend to rely on tried and tested solutions and are sensitive to the comfort that comes from knowing that their contacts operate in a well-regulated framework.

2. Let's make a prediction. In your opinion, what is the future of money and the payment system? Will banks still be relevant fifty years from now?

Money will continue to exist. Maybe not in its scriptural form, but in a digital reincarnation. Moreover, what will stay is the need for stability and for trust in the system, that can only be guaranteed by the central banks.

Banks will stay relevant in the payment’s ecosystem and more particularly, those banks who will have embraced innovation and new trends in payments and will have built bridges with FinTech’s.

3. Banks are seen as rich and profitable enterprises and are looked upon with a certain contempt or jealousy. But could one not say that it is good that the banks are profitable?

Absolutely. Banks play a pivotal role in the economy. So it is of public interest that banks remain profitable. Because only a profitable bank is stable, can make loans, is resistant to shocks, can manage risks better, and can invest in innovation for its customers' benefits.

4. So how do banks improve our lives?

Every day consumers make millions of payments and transactions. Every day, businesses buy and sell goods, pay their employees and suppliers, manage their cash flow, and invest in new equipment. Every day, households and businesses obtain loans to finance their projects. Everyday banks consider customer feed-back and invest in new services, like improved banking apps. All this only functions thanks to a stable and secure banking infrastructure.

5. What are your five useful tips to our readers who want to choose a bank that redistributes its benefits?

Look for banks that explicitly mention social responsibility, sustainability, or community development as part of their core principles.
Look into the bank's community involvement programs and initiatives.
Examine the bank's lending practices and policies. Does it prioritize lending to small businesses, affordable housing projects, or social enterprises?
Look for banks that demonstrate transparency in their financial practices.
Explore banks that offer sustainable and ethical banking products.

About the blog:

There is an urgent need for rapid transition to global sustainability. Business and industry have enormous social and environmental impacts. "Why does it matter?" is a bi-monthly blog that aims to elucidate this important topic through the eyes of our experts.

Don't miss out our experts' practical tips for your daily life and be part of the positive change.

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