Extended monetary stimulus and the resultant low interest rate environment have made consolidation and partnerships essential to maintaining the health of the banking industry, particularly in Europe, the chief executive of ING has told CNBC.
Speaking at the World Economic Forum in Davos, Switzerland, Ralph Hamers said that European banks still had a long way to go in order to offset the pressures on margins caused by quantitative easing and that cost-cutting measures remain inevitable as they try to embrace new, more efficient, systems.
"Banks will survive but banks will need to consolidate in order to find room to invest in digital," Hamers said.
He said that banks must open up to the idea of working alongside fintechs, adding that is a "win-win-win" strategy for both sides – with the client emerging the ultimate winner.
"Banks can learn from the fintechs; fintechs need the clients of the banks and the capital from the banks and the regulatory knowledge from the banks: and in the end it's the client that wins."
ING is focusing heavily on its digital strategy, which Hamers says is enabling digital markets to grow "very fast" but which has led to job cuts in its branch markets.
ING stocks have risen over 20 percent in the last 12 months following its largest restructuring since the financial crisis of 2008. Return on investment at is currently at 10 percent this year.