This speech was given by Johan Thijs, the Chairman of Febelfin, at Febelfin Connect 2022, Febelfins annual networking event.
I sincerely apologize that I have to address you in this awkward way. But a quarantine after a positive covid test is in control of my life till next Wednesday. By the way, I caught the virus after participating in an international investor conference in London. So be careful.
Anyway, today’s conference is the postponed version, due to covid, of an originally planned Febelfin event in the fall of 2021. At that time, October, November last year we were living on high hopes. We thought that covid, in its Omicron variant was on its way out. We would, as it was called, regain back our freedom. It was just a matter of time before we could go “back to normal”.
“Back to normal” meant amongst others that the Covid health risk would be under control (ok, there was still a risk of getting infected, but the mortality risk was remotely low), that economic growth would rebound further from the lows in 2020. Even inflation which was quite high , was not really a worry. Wasn’t that inflation mainly energy price driven and, as a consequence, to be temporary in kind ? It was almost certain that inflation was going to go back to its more normal levels, around 2 percent, by year end 2022. Moreover, given this higher inflation, central banks, including the ECB, were considering or were even increasing their policy rates. Financial Market’s reactions steepened the yield curve, which is beneficial for the banks amongst us. That outlook, after years of low interest rates, would generate extra revenues for our banking sector. Revenues on top of already stellar 2021 results. The future was looking bright…
Unfortunately, on the 24th of February Russia invaded Ukraine.
The current war in Ukraine and the increasing geo political tensions in the world, make us realize that “back to normal” is in the short term no longer a viable option and is, for sure, no longer applicable to our current situation. The financial industry, us, we are back again in the high alert mode.
Dear colleagues, the challenges we are facing today are multiple and significant. Let me name a few :
During the panel debate, my colleagues and the professor stated that , as a matter of fact, a lot of our customers have the data not available, or do not want to share the data because they fear the consequences. Clients, financial institutions, supervisors and regulators have to support each other and work harder to make the transition of the environmental change happen. Fingerpointing and isolating one of the participants in this extreme difficult task will only make things worse. Isolation makes the other feel getting off the hook.
Cyber threat, digitization, the war for talent, PSD2, GDPR, Schrems, fintech and other big techs,… are a couple of other challenges we are facing in the financial industry.
In this challenging environment, financial institutions like banks, asset managers, leasing companies and insurance companies have to stand firm. We will continu to serve our customers, grant them loans to build their dreams and to support the economy. We will continu to manage the deposits and other investments of our customers to saveguard their financial well-being. Just like we did quite successfully during the covid crisis.
My call towards all of you, colleagues, but also to politicians, policy makers, supervisors and others, my call is simple : we are into all of these challenges together and we are all part of the solution. Let’s work together to create a better future rather than pointing to each other for shifting responsibilities. Rome was not build in a day, neither will be the new normal. Let’s put all our energy and all our effort into creating a stimulating, energizing working environment that triggers progress, step by step, ultimately achieving a prosperous new normal.
Ladies and Gentlemen, every dark cloud has a silver lining. I wish all of you a pleasant evening, a great continuation of the event and remember : united we stand strong, united we will prevail.
Johan Thijs, Chairman of Febelfin