Academic journal article ABA Banking Journal

Ready for the Next 125.weeks?

Academic journal article ABA Banking Journal

Ready for the Next 125.weeks?

Article excerpt

ABA DIDN'T GET TO BE 125 years old by clinging to the past. The association is, and has always been, a progressive organization led by forward-looking bankers.

We took our cue from that standard in putting together a special report on the Future of Banking for this ABA convention issue. The report, which begins on page 51, focuses on the period from now to about two-and-half years out, which seems a digestable slice of the future.

There is a great deal of interesting reading in the report, as well as in the rest of the issue. One comment in particular in the special report caught our attention. It was made by Wells Fargo CEO Dick Kovacevich, always a keen observer. He said, in regard to financial services, "The world today is so competitive it's not going to let everybody do the same thing...Average doesn't win.

Two simple statements, yet think how much cumulative change is contained in them.

For one thing, he used the word "win." That of course implies, "lose." For many years banks did not lose. They failed occasionally, but that was usually credit related. They really didn't lose in a competitive sense. Now, that possibility is quite real.

Regarding the point about not doing the same thing, you might wonder how different 8,000 banks can be. Kovacevich responds that one way you can be different is simply to execute the same strategy better than your competitors.

As bank investor/analyst Tom Brown observes in the same article, "We have an obsession to talk about the industry" versus about individual companies within an industry. …

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