Unbundling Financial Supermarkets

I just came across Tom Peters’ exercise in pattern recognition, commenting on three news announcements in a 48 hour period.  I couldn’t agree more.

His blog reminded me that I have long had a particular problem with the metaphor of "financial supermarkets."  Now, let’s see – when was the last time you ran into a supermarket that grew its own fresh produce, processed its own packaged goods and manufactured all the other stuff it offered for sale?  Yet that is exactly the business model that many major financial institutions embarked on in the 1980’s and 1990’s.  These so-called supermarkets have a choice – are they in the customer relationship business or are they in the product innovation and commercialization business? Straddle strategies are becoming less and less tenable.  Choices need to be made – unbundle and then rebundle through collaborative relationships, not acquisitions in the quest for elusive synergies. I have written about this before, both in this blog and in Harvard Business Review (purchase required).  The chickens are coming home to roost as financial markets become less and less patient with scale for the sake of scale.