For the first time in nearly two months, I did not leave the friendly confines of Washington, D.C. for work. Next week, AA gets my business back with a trip to San Francisco — followed by one the following week to Chicago and the next, to New York and Nashville. Yes, I anticipate sharing a number of stories in the weeks ahead, but these three had me excited to post today. As always, my #FridayFollow-inspired post on things I heard, learned or discussed that relate to financial organizations.
(1) File this one under “things that make you go hmmm.” Earlier this week, the American Banker published an interesting piece entitled “Fed Reveals Secret Lessons of Successful Small Banks.” As I’ve written in multiple M&A-focused posts, many investment banks predicted a wave of consolidation among community banks after the financial crisis hit while positing that financial institutions need at least $1 billion of assets to compete/remain relevant. This piece, however, cites recent St. Louis Fed research that shows the asset range with the most “thrivers” — the term the StL Fed used to describe remarkable banks — was $100 million to $300 million. As the American Banker notes, much of the research stemming from the crisis focused on the mistakes banks had made, so the St. Louis Fed decided to take the opposite approach. If you have a subscription to AB, their recap is worth a read.
(2) Disruptive technologies were front & center a few weeks ago in New Orleans at our annual Growth Conference. Yesterday afternoon, McKinsey put out “Disruptive technologies: Advances that will transform life, business, and the global economy.” While not specific to our industry, the fact that the “mobile internet” placed first should reinforce the conversations taking place in bank boardrooms today. According to the authors, 4.3 billion people are yet to be connected to the Internet, with many expected to first engage through mobile devices. Considering the six-fold growth in sales of smartphones and tablets since launch of iPhone in 2007, well, you can see why I’m bullish on banks getting social and enhancing their mobile offerings ASAP.
(3) Finally, for those quants looking for a good, non-Krugman economics piece, look no further than the NY Times’s “Economix” blog. The most recent post: How a Big-Bank Failure Could Unfold. In the piece, the authors consider what could happen if there were a hypothetical problem at a major international financial conglomerate such as Deutsche Bank or Citigroup. As they note, “defenders of big banks are adamant that we have fixed the problem of too big to fail.” This entry considers the alternative. So for those with a desire to stay up late during this Memorial Day three-day weekend? This might be a read for you.