Developing a Framework\ud for Derivative Sales within Strategic Business Units\ud of German Savings Banks

Doctoral thesis English OPEN
van Bracht, Jan
  • Subject: HC | HG

The implications of the western financial and economic crisis brought the global financial system into a system-threatening imbalance. Even though a total breakdown of the financial system has been averted, all parties concerned are still confronted with the consequences. Thereby, banking institutes are challenged by a high level of complexity and dynamics introduced by new regulatory frameworks, turmoil in capital markets and cautious customers. All these changes result in the need for banks to draw the necessary conclusions for their individual strategies to survive in a fiercer competition. Against this background and challenges, numerous German savings banks currently re-examine opportunities to optimise their (net commission) earning structure by offering liability derivatives to their clients.\ud The aim of this thesis is to provide a better understanding of such derivative sales in German savings banks by developing a conceptual framework exploring and explaining the critical factors for establishing a business-level strategy for this highly ambivalent business field against the background of the crisis.\ud Taking the ontological and epistemological position of a constructivist, the strategy of inquiry was informed by a (qualitative) grounded theory approach, using semi-structured interviews with experts as data gathering technique. The underlying emphasis on three different German savings banks in relation to size, location and business strategy offered a solid base to meet the set research objectives and to establish new primary findings.\ud Based on an exploration of the institutes’ courses of action, a discussion of the financial crisis’ influences and derived expert views on success and sustainability for the business field, five main categories were elaborated, which differentiate successful from less successful business units. For each main category a partial model was created explaining interdependencies and causalities. By consolidating these findings and partial models, an initial conceptual framework was developed, which supports the implementation of a possible successful and sustainable business-level strategy for derivative sales in German savings banks.\ud The improved understanding and the conceptualisation of derivative sales in savings banks are highly relevant for practice and theory as they offer in-depth-expertise of a market-environment which is swiftly and radically changing but still has high potential for increasing customer loyalty as well as profits and thus can generate competitive advantages for the institutes offering these services.
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