Laubscher points to international companies such as Sony, Tesco, BSkyB and Microsoft, all of which are making forays into financial services. I'll tell you where my bet is. What banks traditionally had was a customer base on one side, and a database on the other. In the middle was a clearing and branch infrastructure, which presented huge barriers to entry to new competitors. Now, technology comes in and makes the incumbent companies more vulnerable than they've ever been.
Technology is rich in function and broad in scope.
What's worse for the incumbent banks, Laubscher says, is that new competitors can choose which part of the value chain they want to pick. Yet, adds Hore, few banks understand their real costs because of cross-subsidisation between products and customers. Surviving and thriving in the New Economy is all about choosing the right technology platforms and using them to ruthlessly optimise processes, Laubscher says. The bank must be doing something right. It was a risky decision.