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Patrick McNutt patrickmcnutt

The Competitiveness Challenge : Banking & Financial Services IBF Breakfast Briefing, November 30 2004. Patrick McNutt www.patrickmcnutt.com. Outline of Presentation. Competitiveness Defined The Competitiveness Challenge Retail Banking, Financial Services & the Competitiveness Challenge

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Patrick McNutt patrickmcnutt

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  1. The Competitiveness Challenge:Banking & Financial ServicesIBF Breakfast Briefing, November 30 2004 Patrick McNutt www.patrickmcnutt.com Patrick McNutt & Associates

  2. Outline of Presentation • Competitiveness Defined • The Competitiveness Challenge • Retail Banking, Financial Services & the Competitiveness Challenge • Understanding 21st Century Competition • Concluding Thoughts Patrick McNutt & Associates

  3. Competitiveness as ‘Hamlet’ without the Prince of Denmark • Viewed in terms of competition: nation & businesses; comparative advantage or ‘facilitated competition’ • Business decision rule: responding to market events: foreign sourcing & interdependence • Competing in a ‘geographic market’? Cross-border v financial markets ‘evolving as systems’ • Handling ‘regulatory burden’ in a new world of governance post-FSAP harmonisation Patrick McNutt & Associates

  4. The Competitiveness Challenge • Reality check: are you a global or niche player? • How to manage Irish businesses in the wider context of (say) the EU • Capture value and also enhanced foreign capacity to capture value (reverse engineer) • Big in local concentrated market v small globally • Based in Ireland (yes/no) but can act globally (yes/no)? Patrick McNutt & Associates

  5. Retail Banking, Financial Services & the Challenge • About being a different type of bank or financial institution: financial conglomerate or traditional retail bank + financial innovations • Strategy becomes more geographically focused • Strategy becomes more organisationally coherent • Do not destroy value or dilute EPS • Understanding 21st Century Competition Patrick McNutt & Associates

  6. Understanding 21st Century Competition:Micro-structure • Focus on costs + choice of cross-border entry model: subsidiary or branch network. • Obtain (international) economies of scale • How supportive is government policy? – Consolidation of retail banks at a national level? • Financial innovation = something new that reduces costs or satisfies customers’ demands • Impact of Technology on B2C and B2B • Competition leads to concentrated markets Patrick McNutt & Associates

  7. Understanding 21st Century Competition:Macro-structure • Working together solution: financial services and the regulators • Financial rules should be ‘competition-neutral’: let the market evolve • Globalisation & international competitiveness • EC’s FSAP: Realistic Target 2005? • CESR and Uniform implementation of Directives • EC Directives v US law Patrick McNutt & Associates

  8. Concluding Thoughts • Transposing into national law: ‘equivalence’ & co-operation amongst competitors • Pan-European Ombudsman v EU ‘SEC’ • Integration & Domestic consolidation: ‘ahead of the pack’ v ‘lagging-behind’ • Define Competition in a ‘conglomerates’ world • Lamfalussy flexibility: encouraging innovation • Competitiveness: as a bank or financial institution: what market should we be in? Patrick McNutt & Associates

  9. Pause and Reflect • “Ideal Goals Grow Faster Than The Means of Attaining New Goals Allow” deJouvenal Patrick McNutt & Associates

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