We conducted hundreds of interviews with the people at the helms of leading banks from Asia, through Africa and Europe to the Americas, and all the countries and regions in between.
At the end of that three-month process, we recognise in this issue the achievements of banks and investment banks with close to 200 country awards, more than 50 regional and 22 global categories. All of our decisions are worthy winners; there were countless others whose stories could easily have been recognised, and whom we will continue to follow closely.
The awards decisions this year clearly show that the post-financial crisis industry landscape is starting to take on a firm shape.
The banks doing well have found the right model for them. Often, credit for that must be shared between their current leaderships and the fact that their firm went through a near-death experience. That applied to last year’s best bank, UBS, which continues to thrive on its foundation of being the world’s leading wealth manager.
It applies to this year’s best bank, Citi: it’s a smaller, smarter, more focused institution, but one that sees a gap as the last remaining global universal bank. And it’s also the case with Morgan Stanley, which has rebalanced its business with the addition of steady income from a leading US wealth management franchise.
What they have in common is that the proportion of their respective revenues from volatile markets business is much lower. The challenge for Europe’s remaining contenders in investment banking, such as Deutsche Bank and Credit Suisse – both of who are under new leadership – and Barclays, is to find a way to do the same and stay relevant in these markets.
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Since the financial crisis, the phrase ‘What distinguishes us from our competitors is our focus on clients’ has been a recurring, and often irritating, line trotted out by far too many bankers.
The truth, of course, is that client business is more important than ever – certainly since the creation of the big global banks in the 1990s.
In fact, the upshot of this is that most of those big banks have dramatically cut the number of clients they serve. Clients are important, but only as long as a bank’s share of wallet is high enough to justify the capital they commit.
That’s smarter business; it’s also an opportunity for local and regional banks to step in and build profitable relationships with clients eager for their services.
Technology
The new ‘Putting clients first’ is ‘We’re a leader in technology’. We lost count of the number of times bankers claimed that one of their competitive advantages was that they were investing in small tech start-ups, or spending more on their IT systems.
Updating or replacing your IT system is not an easy thing for any company to get right, let alone for one that operates in many different products and jurisdictions. As one bank CEO told us: “It’s like trying to change the wheels on a lorry while it’s still travelling at 70 miles an hour.”
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Very few banks have even begun to grasp the challenge beyond mouthing lofty aspirations towards so-called ‘digitization’ – and most of those are in retail: Spain’s BBVA (which came close to winning our best global bank award because of its leadership in technology); ING, which launched direct banking in Europe in the 1990s and wins our best bank in western Europe award; and Canada’s TD Bank, best in its own country and mounting a robust challenge to laggardly competitors in the US.
Digital and data go hand in hand. It’s a concept that investment banks know they need to get on top of, but don’t yet know how to go about. It should come as no surprise that Goldman Sachs – home to thousands of bankers with backgrounds in areas such as engineering and technology – is taking a lead: one of the big reasons it wins our best global risk adviser award this year.
Banks are at least taking their role as corporate citizens more seriously. It’s instructive that there were more pitches for our corporate social responsibility award than for any other global category. What’s encouraging is that the vast majority of these submissions detailed real, market-driven attempts to do more good – and restore some reputations a little too.
In the meantime, all banks have armies of compliance officers trying to make sure that banks don’t make more mistakes that further sully both their standing – and their bottom line. Compliance is undoubtedly the biggest growth industry in global banking. But we don’t have a compliance award... yet.