Are the Largest Financial Institutions Really 'Global'?1

Zusammenfassung

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This article analyzes the strategies of ten major financial service providers with global intentions, demonstrating that none of them is truly global (with the possible exception of HongKong Bank), though each has some fully global reach through electronic channels and key financial center operations. The article also analyzes their strategies in search of models that may prove viable in enabling financial service providers to compete successfully against rivals in international markets. Most firms are present in at least two of the three segments of financial services: commercial and investment banking, and insurance. These leading financial service providers are largely bi-regional in their income, generally in North America and Europe. In the locations of their offices, all are essentially global in scope. In strategic intent, all ten firms are again quite global, focusing on financial center cities.

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Auszug

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Are the Largest Financial Institutions Really 'Global'?1

Introduction

The process of economic opening that has characterized countries from China to Argentina in the 1990s and early 2000s has led to pronouncements of global strategic intent by virtually all of the Fortune 500 and Fortune Global 500 (including non-US) firms in recent years. Likewise, in the financial services industry in particular, advances in technology (particularly the Internet) have pushed the leading financial service providers to offer their services globally tiirough electronic channels (e.g., Grosse 2004). With all of the superficial evidence demonstrating a globalization of these firms' strategies, just how global is the reality? This article describes the strategies of ten major financial service providers with global intentions, demonstrating that none of them is very global at all (with the possible exception of HongKong Bank), and yet each has some fully global reach through electronic channels. The article also analyzes the strategies in search of models that may prove viable in enabling financial service providers to compete successfully against rivals in international markets.

In addition to the pressure to globalize, firms such as JP Morgan-Chase, Barclay's Bank, UBS, and Merrill Lynch are facing a simultaneous pressure to be "financial supermarkets", providing commercial banking, investment banking, and insurance services to their clients. This 'bancassurance' (or 'allfinanz') model has been asserted as a necessary direction for leading financial firms since the mid-1990s, though almost ten years later the only firms committing major resources to all thre...

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