Alliances essential for growth says bank IT chief

Alliances essential for growth says bank IT chief

Leading banks must form strategic alliances if they are to succeed in new e-markets, says Loyd Darlington, president and CEO, Emfisys and head of e-business at Bank of Montreal.

"Alliances tap the power of several companies to bring new products to market faster when first-mover advantage is crucial," he says. "They allow companies to take full advantage of rapidly changing technology, and allow companies to turn internal expertise into marketable products."

Speaking to business leaders in Toronto, Darlington illustrated his point with reference to BMO's past experiencee. Citing the Air Miles programme developed with Safeway and Shell, he said: "We were the first financial institution in Canada to offer a broad-based incentive programme, and today we are the only financial institution to sponsor this programme. Air Miles now has about 100 sponsors and reaches more than six million Canadian households."

In technology, he pointed to Veev, the bank's wireless venture launched in conjunction with 724 Solutions and Bell Mobility. "Veev introduced North America's first integrated wireless banking and investment service, an accomplishment beyond the reach of each of the individual partners," said Darlington. "The bank has great strengths in e-commerce, information technology and processing capabilities. But we also realise that alliances with other technology companies can build strength on strength."

Bank of Montreal's joint venture with the ANZ, Barclay's Bank, and American Management Systems was also referenced. The new company, Proponix, will provide trade services processing around the world. "The venture will enable the banks to build a new revenue stream and invest in the growth of their trade business," said Darlington.

By mobilising and sharing the expertise of several partners, companies tie up less capital than with traditional acquisitions, allowing them to pursue other high return activities, he explained.

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