Wholesale Banking 'Must' Direct Spending at New Revenue Sources
While the banking industry at large has prospered since the millennium, thanks to its continuing strong retail performance, wholesale business lines have remained mired in weak loan demand, deteriorating credit quality, large loan write-offs and an unusually sluggish economic recovery, according to a new report by TowerGroup. Critical to wholesale banks’ ability to break out of their income slump will be the new technology investment decisions – closely aligned to strategic business imperatives – that they make now, said TowerGroup, adding that technology spending should be directed toward developing new revenue streams as a matter of priority. The strategic business imperatives for wholesale bankers have shifted five years ago, as a result of market conditions and advances in technology, said the report. Wholesale bankers must now focus their longer-term strategic efforts on transforming the traditional relationship-based business model in order to succeed and increase shareholder value in the coming decade. Deploying technology as a productivity tool for relationship managers to drive new revenue will be a core element in that transformation, added TowerGroup.