Since the financial crisis, supervisors across the world have been trying to work out ways of dealing with banks deemed to be ‘too big to fail'. The most obvious solution (and the most simplistic) is to chop them up into manageable bits so none are too big
or interconnected to be allowed to fail, because the current received wisdom seems to be that banks that are smaller and more modular are less of a risk.
But from a payments perspective, there are two counter-arguments to this approach.
Firstly, the big banks that operate, and offer payment services, internationally are actually made safer by their geographical spread - there is no concentration of risk on any one particular economy. And that's an important element in terms of regaining
customers' trust.
And the second point is that the banks that operate and provide payment services internationally offer clients something that others cannot:
- A consistent level of service across all points of contact,
- The benefits of payments' best practice from their widespread experience,
- Better management of their clients' cash across borders.
So there are good and sound reasons to applaud the big banks' revival of interest in the unglamorous business of taking deposits and processing payments. We need big banks to do this. Mind you, they'd better have the right systems in place to do it properly...