The past decade has been unique for financial services industry and the economy in general. The Great Recession-which in the United States began in December 2007 and ended in June 2009- was mercifully brief but could have been far worse. It was followed by the current economic expansion, which at 124 months is now the longest expansion ever recorded.

Interest rates and accommodative central bank monetary policies were a key catalyst of the recovery. But the path of interest rates and economic growth has diverged widely among countries, and where it has left us is uncertain. Central bank interest rate policy was previously used as a temporary lever, not a long-term crutch, but some countries have kept interest rates low throughout the economic recovery. For many years in Europe, and now in North America, the positive impact of low interest rates is counterbalanced by the inability to lower rates much further as an economic growth lever if economies weaken. Let’s examine negative interest rates and their impact on retail banking businesses and technology.