Customers stick with pick and mix
European corporates are responding favourably but cautiously to banks offering one-stop-shop services. On the whole, though, the banking trend is not demand-driven and customers are not massively moved by the cost-saving considerations touted by the banks. The response is pragmatic with most corporate treasurers recognizing that a multiplicity of banking relationships is advantageous. Investment banks may indeed offer an indefinable added value and commercial banks are still not up to speed in crucial areas, notably M&A.
Ask a senior banker to describe his organization's strategy and chances are he'll soon start talking about "global relationship banking", or being a "full-service provider" or a "one-stop shop". The desire for financial superstore status has never been stronger.
Intriguingly, this aspiration is the opposite of the strategies of most of the banks' corporate customers. Governed by the forces of specialization, they are focusing on key business areas and disposing of non-core assets.
So what is driving the trend among banks to be all things to all people? What is the source of the pressure on commercial banks to underwrite securities transactions, and on investment banks to provide foreign exchange and cash-management services? Although banks claim that they are simply responding to client needs, it's clear that the one-stop shop bank is less a product of customer demand than a defensive strategy to cushion banks against cyclical ups and downs.