Banking: Class Discussion

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Class Discussion

1. Think about the last organization that you were employed in prior to Sloan. What was "your" industry (i.e., the one in which that employer operated)? Think about what that definition includes (and excludes).

the banking system – and the wider financial system – plays a crucial role in a market economy. It connects savers and borrowers, investors and users of funds, it allocates capital, it provides payment services, it insures against risk.

Core banking services: personal and business current accounts, overdrafts and savings products traditionally associated with banks Secondary banking services: unsecured and secured loans to personal and SME customers. Peripheral banking services: such as insurance, pensions, wealth management, hedging, letters of credit and legal services

1. Was there a lot of entry in your industry? Why or why not?

Compared to historic trends, I think there has been a lot of entry in the retail banking segments. - Start-up businesses
Metro Bank (Vermon Hill)- new 'brand', differentiation by using newer technology, branches open 7 days a week, late hours, good locations - all reqd for in and around London; better product features; my experience. Walton & Co

- UK companies expanding into Financial services
M&S, Tesco - existing supermarkets having large network and retail space Virgin Money - buying up 'bad' assets of Northern Rock at a cheap price from the govt. - Overseas
Santander buying in A&L, Abbey

what are they bringing in - new approach to service; innovative branch-service proposition

Why -
political will - EU, BoE/FSA; regulation
riding on sentiments against the banking post financial crisis; opportunities post financial crisis; shortfall in the supply of credit; low interest rates;
reduced competition (before crisis there were 9 banks in the FTSE 100, now there are 5 - nationalized fully/partly or acquired. Post-crisis hangover: incumbents are...
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