Must read: Report: Digitization Threatens Banks with Low Profits
European banks are at risk of losing a significant portion of their profits with digital disruption cutting their profits in half by 2020, according to a report from McKinsey. The report, A Brave New World for Global Banking , states that major developed markets in Europe and the United Kingdom have $35 billion, or 31 percent, of profits at risk. It adds that more severe digital disruption could further cut banks’ profits from $110 billion today to $50 billion in the next three years and slice returns on equity (ROEs) in half from one to two percent in the same timeframe. However, the study found that of the major markets, the United States banking industry appeared to be in the best position to face these issues with the recent presidential election playing a role in the hopes of a gentler regulatory environment. Japanese and U.S. banks have between $1 billion and $45 billion in profits at risk by 2020 to digital disruption. Yet, after mitigation the profitability would on