Author: James L. Darroch
Banks are in the information business which in order to be properly priced, must be fully disclosed. However, making it readily available to the public can damage or lessen its value. The banks will only receive full value for knowledge assets by keeping them away from the viewing public and restricting them internally. Since banking products have become commodities, other multinational corporations have gained a better understanding of their own banking needs and no longer depend on the bank the way they did in the past. They've gone and hired the best and brightest to agressively compete against their former lenders in the mortgage and loans markets. The banks are now more focused on less sophisticated individuals and have started charging customers for things that used to be free. When you want a product or service, you're going to pay for it. "In 1991, Statistics Canada reported that since 1987 the banks have made their biggest revenue gains through service charges." CHAPTER SIX:Financial Performance and Strategic Change/PG 239. The focus for bank managers is cost control, increased productivity and the ability to create shareholder value. The government's anti inflationary program of the mid nineteen seventies imposed a ceiling on bank profits by freezing service charges and placing restrictions on interest spreads. These applied only to domestic operations but forced the big banks to focus on expanding their international operations in order to grow profits. Follow the big Canadian banks as they compete globally in an ever - changing financial arena.