Community

Bo;

As a commercial banker of a mere 22 yrs, I wholeheartedly endorse your views.

Bankers always have been in the business of risk management- and they have built this up over centuries in 3 main areas (rather like 3 legs of a bankers stool), namely:

Credit Risk Management- ie The Acceptance of Deposits and lending of them to Borrowers.

Capital/Trading Risk Management- ie Trading often on their own account in markets, currencies etc

Operational/Transactional Risk Management- ie The moving of money and/or value around networks/clearing/settlement systems etc domestically & globally 24x7. Historically, many will view this as the original role of the banker- with the other two being "applications" thereof.

Today two legs of the bankers stool are seriously damaged, but that 3rd leg Operational/Transactional Risk remains intact and keeps the wheels of society turning.

There is an enormous financial opportunity (and political gain/qudos) for banks to focus far more heavily on Transaction Management (not just transaction banking) in a world of ubiquitous largely free-to-use electronic networks- where they can help their customers manage the very significant operational risks associated with doing business in this new environment- you mention a few of them; basically, wherever paper and a handwritten signature have prevailed historically (private or public sector), the survivors of these tough economic times will look to use electronic networks and electronic signatures to support their business porcesses- regardless of borders/industry delineations/product set etc.

Bankers have an opportunity of historic proportions to apply their skillsets in this field, which if they grasp it, will help gradually restore the other two legs of their stools.

Dean;

Yes, interesting times...

Strong issuance processes, a contractual framework for managing the liability flows, immediate online validation, a blend of global and local regulatory oversight,  a highly scale-able/distributed model, and the ability to split the application from the underlying ID&V...these are all attributes vital to a sustainable and resilient ID & Authentication trust model......rock on....

Enjoy your holidays,

Best wishes

John G Bullard

Indeed it is a good time for transaction banking (aka Operational Risk Management) when one looks at the traumatic conditions prevalent today in the two other Risk Management disciplines of a bank- namely Credit Risk and Capital/Trading Risk Management.

However for FI's which can take themselves beyond Transaction Banking into the wider field of Transaction Management, the future is brighter still.

By helping their clients manage the inherent Op Risk right the way along the transaction cycle (especially as ever more business is transacted electronically across multiple networks), leading banks are already reinventing their customer value proposition- and from this will come repetitive renewable & high quality revenue streams- exactly what bank shareholders now need/expect..... 

We are entering a time of great opportunity for those ready to grasp it

John G Bullard

IdenTrust, London