Diversification Strategies Emerge in Banking Industry as Consolidation Continues

Strategic Insights -

As the banking industry undergoes significant consolidation, financial services consultants are finding new opportunities to diversify their services and adapt to changing market conditions. Expanding into emerging markets such as electronic commerce and providing more sophisticated services to traditional customers are key strategies being employed by consultants to stay ahead. While some consulting firms are merging with other key players or discovering new markets, others are focusing on developing in-house skills to capitalize on emerging opportunities.

Key Takeaways:

  • Consultancy firms are diversifying their services to meet the changing needs of the banking industry, with a focus on electronic commerce and cost reduction strategies.
  • Consolidation in the banking industry has created opportunities for consultants to work with smaller regional banks and non-traditional players in the Internet-based electronic commerce arena.
  • Industry experts predict a growing demand for consulting services, particularly in the areas of cost reduction and growth strategies.
  • Some consultants are taking advantage of emerging opportunities by beefing up their in-house skills and adapting to new market conditions.
  • Firms specializing in narrow niches, such as profit improvement or traditional banking areas, may struggle to keep up with the industry's rapid changes.
  • Expanding client base and projects are creating opportunities for consulting firms after consolidation of banks.
  • 30% revenue growth expected by Speer & Associates this year, presenting a challenging period for the firm.
  • Traditional banking clients are being served in different ways, offering new consulting opportunities.
  • A new set of lower-end regional banks with several billion dollars in assets are emerging after community banks combine at a faster rate.
  • Consolidation continues to push the need for effective cost reduction and significant growth strategies.
  • Internet payments have undergone significant growth and interest in the past couple of months.

Sources:

  • Susan J. Aluise
  • First Annapolis Consulting (Marc Abbey)
  • Benton International (Jack Benton)
  • Dove Associates (Chuck Hieronymi)
  • R.C. Rawson Co. (Ronald Rawson)
  • Speer & Associates (Richard Speer)