Kristin R. MoyerRed deer still refuse to cross the border between Germany and the Czech Republic (see “Deep in the Forest, Bambi Remains the Cold War’s Last Prisoner,” Wall Street Journal). During the Cold War, a high electric fence and barbed wire fence separated West Germany and Czechoslovakia. This would at times sever the heads of deer.
The fence is gone, but red deer still don’t cross where the fence used to be. Apparently all that’s there now is a path in the woods as part of a conservation area. A couple of males have crossed the border (and then stayed there), but females won’t go near it. From the article I read, deer have traditional trails that get passed through generations – a kind of herd, collective memory.
Maybe I’ve had too much Diet Coke today, but I see some parallels for the banking industry. There’s much talk about the new normal today. Our fear, as a banking and investment services analyst team, is that there will be no new normal in banking.
The deer along the old iron curtain are not changing, and it limits them. Rather than going out and finding new territory, they are staying where they are. This is an old normal.
In banking, transformation has become an overused way to describe even surface-level efficiency gains (Gartner clients, see “Banking Transformation Is Now So Overhyped That It’s Reinforcing the ‘Old Normal“). If that is all that happens, then there will be a return to the old normal (business as usual in banking) rather than a new normal. I believe a new normal characterized by radical change is needed for banks to survive as relevant players in the financial supply chain.
Category: operations Tags: new normal
2 responses so far ↓
1 Karthik TD November 23, 2009 at 6:23 am
Hi Kristin,
Yeah, I agree, ‘old normal’ is the ‘new normal’ today in most of the banks which showcase surface level gains as ‘transformations’. And it is very important for banks to go for new territories, breaking their ‘old normal’ tradition and traits.
Banks have to hunt for new financial supply chain in order to survive. And today, medium/tier 2 banks are doing this more efficiently than others. Or in other words, they are positioned well than their global big peers to do that.
I did like the analogy – banks & deer are great combo!
Cheers
Karthik
2 Kristin Moyer November 23, 2009 at 11:35 am
Hi Karthik, thanks for your comment – I agree. Some of the most interesting and aggressive transformations I see right now are happening among medium/tier 2 banks, and also in emerging markets. For example, we have a client in Colombia that has completely transformed their operations and are now turning to applications. We have another client in Peru that is mapping all of their processes into common processes and then specific processes (for example, lending, payments, etc.).
Your comment on hunting for a new financial supply chain I also agree with. For example, what if banks outsourced loan origination and or loan servicing to P2P lenders?