He Impact of Today's Technology on Banking

6133 Words Nov 3rd, 2008 25 Pages
I am greatly honored to be here as Chairman of the Basel Committee on Banking Supervision. I’d like to begin by thanking the Swiss National Bank, Kurt Hauri and the Swiss Federal Banking Commission, and Andrew Crockett and the BIS for organizing and hosting this important conference. They’ve done a wonderful job, for which I know we’re all very grateful.

It is also a great pleasure to be with you under such dramatically different circumstances than when we last gathered together. Just two years ago, turbulence in the financial markets around the world had affected, in one way or another, the banking systems of virtually every nation, and bank supervisors were struggling to preserve confidence and stability. Today, of course, the global
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Today, information of all kinds is transmitted easily, inexpensively and instantaneously around the world, providing finger-tip access to anyone with a laptop computer, cellular phone or palm pilot. As but one example, I’d mention that, as of last month, the most popular items on the Federal Reserve’s public web site – including statistical reports on foreign exchange rates, selected interest rates, consumer credit and industrial production, along with press releases and Federal Open Market Committee announcements – are accessible by wireless remote.

If information is power, and it surely is, then a profound and irreversible transfer of power is underway in the global financial marketplace – from providers of products and services to consumers. For example, the Internet – something most of us had never heard of five years ago – is changing how consumers shop for financial products and services, the prices they pay, and with which providers they establish relationships.

In response, financial institutions, who once viewed technology mainly as a cost center, now see the Internet and other technological capacities as strategic tools for enhancing the value of customer relationship through cross-selling and improved customization. A recent survey of bank managers in the United States reported that, for the first time, investment in Internet
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