Do we need a recession to boost banking industry efficiency?

At a roundtable discussion this morning before the kick-off of the EBAday payments conference and exhibition, we had an interesting discussion on the topic of payments convergence - from ACH-card network linkages to retail consumers' expectation of simple, fast and convenient payment initiation regardless of what route a payment takes through a bank, industry scheme or clearing house.

One banker from Finland brought up the major recession her country faced in the early 90s, and credited that as the catalyst for a lot of major positive changes in the Finnish banking sector. From 55,000 employees in the industry at the start of the recession, around 20,000 were made redundant, and this forced banks to look at more efficient ways to serve customers -  paper cheques were removed from the system, and there was a big push towards self service internet banking and electronic payments.

Given the current economic climate, this got me wondering about the potential impact on industry development. On the one hand, during an economic slowdown could there be any positive results from an increased focus on efficiency?

But on the other hand, given the huge cost of compliance with Sepa, PSD and domestic initiatives such as UK's Faster Payments (as well as lost revenue from cross-border transaction fees or fee-chargable domestic schemes such as CHAPS) will belt-tightening mean progress slows even further?