1. Shaping Up to Global Banking Leadership and Management Development Challenges Stephen Regan Cranfield University England s.regan@cranfield.ac.uk

2. Enter the Dragon: The Beginnings of Globalisation l 1985/86 Deregulation –Banking Act –Building Societies Act –Financial Services Act l Creation of a single competitive arena l Impact of this on strategies l Leadership agenda

3. The Basic Economics of a UK Retail Bank Financial Intermediation Retail Deposits Wholesale Deposits Wholesale Lending Retail Lending Business Consumer Structured Maturity Transformation Risk Transformation Aggregation/Disaggregation Competitive Advantage: Information

4. Banks as Customer Focussed Businesses Attractor Manufacturer Wholesaler Enabler Asset Gathering Liabilities Management Deposit Non deposit Credit Cards Personal Loans Mortgages Current Account Increasing Competition Increasing Competition Sales/Products

5. Strategies in the banking supply chain Attractor Manufacturer Wholesaler Enabler Channels Affinity CRM Call Centres, BPR, Automation, Cost reduction Risk averse lending Welcome borrowers Information-ERP.SAP.accenture Staff-ERM-Ulrich-accenture Customers-CRM Terradata Accenture

6. The New Competitive Arena Attractor Manufacturer Wholesaler Enabler Virgin HBoS Sainsbury RBS RBS(CBFM) IBM Tesco NatWestRBS IBM Hbos Corp GUS Centrica GE Capital

7. The Global Challenge Attractor Manufacturer Wholesaler Enabler Global Financial Services Brands: Amex, Fidelity,… Investec? An emerging superleague based on global scale HSBC, Citigroup Already Globalised: Bulge Bracket, Chase, State Street, Outsourcing Partners: IBM, Accenture, Experian

8. An Objective assessment : UK banks readiness for the future Past strategies have amounted to Retrench into UK market Rely on customer inertia Expensive marketing mistakes: one stop shops internet banking International losses Branding! Regulatory mistakes: pensions misselling, Cruickshank report

9. Competences of UK banks l What are they globally competitive in ? –Cost management Outsourcing Back office innovation (maybe) Ruthless HR models Process Improvement Consolidation

10. Current Structure and strategic direction of the Industry HSBC Barclays, Lloyds HBoS Abbey National RBS Citigroup HSBC International Domestic Established Entrant Regional Global

11. The Leadership Agenda PEST Market Dynamics Strategies Capabilities Investor Relations Governance Behaviours Cultures CEOs Role Middle Management

12. Cultural Leadership Leadership (Discretion) Capability (Implementation) Vision (Strategy) Senior managers in subsidiaries all add to performance if they do this Discretion Jobs

13. 10 50 250 OLD NEW 260

14. Self Interest, Sympathy and Empowerment l Adam Smith in “The Theory of Moral Sentiments” l Sympathy: fellow feeling, regulates human affairs and is rational l Pure self interest is irrational: the unsocial passions lead to resentment and disorder l Approval is our strongest drive –Overrides material well being –Rank is a state of grace akin to love –Ambition is the driving force of private man –Abilty, prudence and virtue are its features

15. Some Caveats l No society can continue without sympathy l Loss of sympathy (resentment) may be just but it is the hardest trait of all to sympathise with l The importance of justice at all times l And finally –Sympathy can be recommended –It can even be expected –But it can never be imposed