This is wrong. A mountain of academic research and empirical evidence illustrates that skill, not scale, determines success in banking. Beyond this size, diseconomies begin to creep in and management is put under increasing strain. Bureaucratic inertia, particularly, is a direct function of size, as senior management becomes ever more removed from customers and frontline employees. In such an environment, even the most promising initiatives can fizzle.
Energy can dissipate while waiting for various parts of the organization to buy-in.
Business mixes also grow increasingly complex, taxing management's ability to understand each unit's activities. We commonly hear the refrain that banks must grow in order to afford the technology investments needed to remain competitive. While this is true in a handful of individual business lines, it rings hollow at the company-wide level. Thanks to advances in microchip technology, today's marginal cost of computing power is effectively zero. Banks of every size can afford more computing power than they can effectively deploy.