Banks shift gear as mobility goes electric
Banks like Santander, BNP Paribas and SocGen see auto finance and the future of mobility as critical pieces of their overall group strategies. But as mobility becomes an increasingly fractured business, what does the auto finance bank of the future look like?
The enthusiasm for owning and driving petrol-fuelled cars has powered Western economies for almost a century. Banks profit directly from the vehicle industry through both their auto finance businesses and because of the importance of car manufacturers and their suppliers and dealers to corporate and investment banking.
Now, with the rise of new electric vehicle makers, most visibly represented by Tesla, this industry is changing in ways that are both a threat and an opportunity for the banking industry.
Rapid changes in the technology and regulation of cars – and the high cost of buying an EV – mean that outright car ownership is going out of fashion. Many younger city dwellers increasingly see no need to have a car at all. Indeed, if driverless cars ever become a widespread reality, car ownership could eventually become as obsolete as the telephone booth.