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Q&A with Karen Wendt

Exclusive Trusted Magazine Q&A with Karen Wendt, Entrepreneur and Investment Banker.

How could you describe your career path in few words? 

I started my career at the EU Commission as an international Trainee then moving to the strategic department of Deutsche Bank, being responsible for strategic acquisitions and company valuations. I am coming from a small town in Germany and my parents were of the opinion that math, finance and banking is not for women, this is why I wanted to convince myself otherwise. during my career in banking and finance I realized that finance is quite innovative and imaginative, at least when we talk about structured products. I love creativity and therefore this was the right industry for me. I was developing a strategy for Eastern Europe for a small regional bank Bayerische Vereinsbank then, co-lead the build-up of project finance and finally initiated and headed the extra-financial risk management team at UniCredit. the best thing for me is to pioneer and to do new things.

What were the highlights of banking transformations in 2022? Can you give us some major examples?

One highlight for me is Neo banks: Insider Intelligence forecasts that the number of US neo bank account holders will grow 46.4% between 2022 and 2026. Revolut from UK is a good example with its multi-currency transactions and in app investing. This disrupts banking markets tremendously and is moving the envelope from open banking to open finance and investing. Although Revolut has over 10 m clients by now like many of the other neo banks they are not yet profitable. So the next question lying ahead is: until when will neo banks be profitable. In any case traditional banks either will offer neo bank services like ZKB in Switzerland with their digital pension app frankly   or the market goes to neo banks. In any case traditional banks will want to work with Neo banks as customization and customer empowerment are a hot topic in particular for millennials. So even wealth management is no longer save space for traditional banks and they need fintechs to offer customized solutions faster and more effectively to their growing clientele of millennials.

Another compelling trend was banking the unbanked. Humaniq provides a mobile banking solution powered by blockchain, targeting people with no identification documents This segment of people is very large in countries like India and Humaniq believes, that they will reach over two billion individuals in the coming years. Banking the unbanked comes with the aim to financially empower these people by replacing using  bio-identification technology stored on the blockchain for identification. Traditional banks may want to break into the segment of unbanked customers in order to stay on top of the developments. Banks are good at structuring innovative products so they can develop new structured products and tools  and business models that solve issues the unbanked have like microcredit, insurance, building wealth with mini amounts, structured credit products and working with World-Bank for creating a business ecosystem where the unbanked can develop into entrepreneurs.

In your opinion, what are the transformation axes that are becoming more important for banks in the context of 2023?

Visible already now is the customized product offer in a hyper personalized manner to each and every client. Customer centricity and customer loyalty are the topics of today: a lost customer will not come back int the technical age. another highly relevant topic is digital assets, tokenization of assets is easy, putting them on a platform is easy, technically it is feasible, but we also see that all these platforms do not generate liquidity, there is no secondary market building. One nut to crack is how to build a market for tokenized assets that is liquid and has a reliable price discovery function. Tow more trends that are visible today are crowdfunding and offering gaming with assets in model portfolios . Still on the radar is WallStreet bets.

Based on your recent experiences, and if you have one piece of advice to give for the success of transformation projects, what would it be?

Banks need to imagine how the world and the financial market will look like ten years from now. they need to define what value they will provide to whom and how. this is the most fundamental question, otherwise banks will never show the necessary agility that is required in todays markets. One thing is for sure: the future generations take sustainability serious. so any product should be green, inclusive or otherwise creating societal benefit along the 17 UN Sustainable Development Goals.

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