The surplus of providers of cash management services that are chasing corporate America for business isn't news. What would be news would be a change in the current situation, in which no one provider enjoys more than 5% of the business--with the resulting buyer's market.
Consolidation among providers would be part of the answer, according to Thomas C. Theobald, chairman of Chicago's Continental Bank. Theobald believes banking is heading into a period of massive shrinkage. This will not only include mergers, takeovers, and failures, in Theobald's view, but also the spinning off of product lines by some and the snapping up of those by others.
The former Citibank senior executive believes the financial institutions that will weather this period will be those that focus on the markets they serve best.
"Banking is filled with people trying to do way too many things for way too many people," said Theobald. Indeed, Continental's strategy is to concentrate on corporate business-including cash management.