An Accident of History
Financial Services Organizations Were Born Under a Bad Sign

I brought up a pet theory of mine, that it is ironic that the very same companies that touted "automation" and the lack of brick-and-mortar presences as a competitive survival tactic have been the first to fail. "Yeah," Theresa acknowledged, "they did seem to go a little too far out on the ledge, and once they saw where they had gotten, they had no choice but to jump off."

And it’s not only the institutions that are feeling the heartburn; regular folks have gotten caught up in this storm, too. "The bundling of mortgages and treating them as financial vehicles has hit a really broad spectrum of people—not just the borrowers, but also people with retirement accounts, etc. Before, there might have been some malfeasance at a particular institution, but this has reached a lot farther than that."

Theresa continued: "About every 20 years we have something happen like this. In the ‘80s, the crisis was with the savings and loans. We learned a few lessons from that, and we’ve applied those. But this is so far-reaching that it will affect the world economy...not just the US. Of course, there are crazy oil prices and the weakening dollar, so the mortgage problem is not the only cause for the current financial crisis, but it’s certainly a major contributing factor. It has shaken the faith of normal consumers...like us...who don’t have an insiders’ insight into what’s going on," mused Theresa. "Maybe it’s good that we don’t; maybe we’d run screaming..."

What Are Ya Gonna Do?
I can’t tell you how it will play out. Maybe the aging generation is automation-phobic, and once we’re all gone, the financial services companies will be able to turn all their brick-and-mortar buildings into playgrounds and dog-runs. Maybe there will be an elite set of customers, with a specialized set of exceptional needs, that will continue to get personalized service. Maybe we’ll revert to trading cockleshells and wampum.

But I have to confess that my conversation with Theresa, one of the keenest observers I know, hasn’t been particularly encouraging. But this IS a "best practices" primer, so I had to know what companies should do to weather through this rocky patch.

"In an environment of cost cutting, it’s more efficient to look at solutions that apply to other aspects of the business...where else can I apply this tool to get similar returns? Consider even something as granular as contract negotiation; these techniques and technologies might be applied elsewhere," she suggested.

"Furthermore," she advised, "find out what technology might this vendor be working toward in the future that I might be able to apply to an entirely different function in my business."

That’s not the norm. You tend to get tunnel-vision; you tend to think in vertical solutions terms. And frankly, no, organizations DON’T communicate across department lines very well as a rule. "In the same way that financial service providers are obliged to communicate their various services," said Theresa, "so are technology vendors compelled to communicate the breadth of their offerings. Particularly when they aren’t tied to a specific vertical. It’s very important to touch all the operations and not silo themselves."

This document, "Best Practices in Financial Services," is sort of dedicated to that last statement. The sponsors here have developed certain muscles for doing the heavy lifting required by financial organizations, for sure. But without exception, these are products and services that can—and should—be examined for value that may apply all the way across and all the way up and down throughout YOUR organizations.

Wouldn’t be much of a white paper if they didn’t.