1. Patrick McNutt www.patrickmcnutt.com
The Competitiveness Challenge: Banking & Financial Services IBF Breakfast Briefing, November
Patrick McNutt
Patrick McNutt & Associates
06/05/2019

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
06/05/2019

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
06/05/2019

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
06/05/2019

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
06/05/2019

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
06/05/2019

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
06/05/2019

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
06/05/2019

9. Pause and Reflect
“Ideal Goals Grow Faster Than The Means of Attaining New Goals Allow”
deJouvenal
Patrick McNutt & Associates
06/05/2019