Join the Community

22,994
Expert opinions
43,830
Total members
393
New members (last 30 days)
170
New opinions (last 30 days)
28,982
Total comments

Consultant banks: the new frontier?

  0 1 comment

Recently I answered a question on LinkedIn regarding the main drivers of growth in the operating models of financial services.

Briefly, the question related to whether there are alternate models for managing the operations of financial services that go beyond the pursuit of efficiency, productivity, etc.

I had then responded that the boutique banks will gradually move toward organizational structures typically found in consultancies / legal firms, i.e., the partnership structure.

Yesterday, I got thinking further on the topic and, like George Bernard Shaw, asked, "why not?!"

Suppose, a group of seasoned bankers with extensive (and close) relationships with the high networth individuals (in a target market, say the UK) come together to set-up a law firm like structure. Each "partner" is responsible for bringing in the money and has to pay for the attendant costs. This will ensure that the partners go beyond the normal course of duties to bring in more revenues for the firm. Moreover, such a partnership can resist competition from the established banks by focussing on a niche area and leveraging their expertise, industry standing, and contacts. Going further, the attendant costs to run such a firm, say the IT costs, can easily be outsourced, say to a boutique IT consultancy.

I understand that the present-day banks do try to follow some of the same principles and that some non-banking finance companies (e.g., private equity firms) may also be operating on similar lines. Further, the current regulations may not allow many of the features that will characterize such "consultant banks".

However, as Samsung claims, "it's not hard to imagine"!

Your views are welcome!! 

External

This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.

Join the Community

22,994
Expert opinions
43,830
Total members
393
New members (last 30 days)
170
New opinions (last 30 days)
28,982
Total comments

Trending

Teo Blidarus

Teo Blidarus CEO and Co-Founder at FintechOS

The evolution of life-centricity in banking

Igor Kostyuchenok

Igor Kostyuchenok SVP of Engineering at Mbanq

Stablecoins are the Death of SWIFT?

Steve Haley

Steve Haley Director of Market Development and Partnerships at Mojaloop Foundation

Bridging the Gap Between Closed-Loop and Open-Loop Payments Systems

Now Hiring