MANAGEMENT is efficiency in climbing the ladder of success; LEADERSHIP determines whether the ladder is leaning against the right wall - Stephen Covey

Tuesday, October 11, 2005

Convergence in Corporate Banking

If there is one thing that typifies today’s world of commerce, it is definitely the unceasing pursuit of advantages of synergy. We have seen this trend at various levels – from like minded nations coming together to form a union, to corporate giants joining hands through mergers and finally to industrial verticals reorganizing themselves to make the whole greater than sum of the parts. Corporate banking is no different when it comes to exploiting synergy through convergence and it is this change in its working that at once provides tremendous opportunities on the one hand as well as poses interesting challenges on the other.
Corporate Banking – from then to now
If we just focus on the Transactional Services that form a part of Corporate banking, it is obvious that it has undergone an amazing level of transformation in terms of complexity. In the early days, Cash, Trade and Treasury operations were largely transactional silos with specific purposes. Each had a role to play and did just that in isolation.

Then 4 important developments took place:
a) The Information Age came along and brought with it certain demands that businesses organized as above simply could not meet.
b) Working Capital Management requirements of corporates grew exponentially
c) Technology, often the laggard, started coming of age and provided an opportunity to businesses looking for a catalyst to drive their reorganization needs. Drop in communication infrastructure costs and creation of standards are cases in point.
d) Changes in the banking domain.
What do u think the new world of Corporate Banking would be?


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