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While banks and capital markets firms have been compelled to change their structures and corporate cultures, this should not obscure the fact that they are helping to set new precedents. Although they were hit first by the credit crisis, they may be in a position to emerge first and fittest when the storm clouds clear.
Introducing new product is not on the agenda
Banks believe that at a time of widespread suspicion of many financial products, it is inappropriate to test the market with new offerings. The emphasis will be on discarding failed products and perhaps returning to straightforward products in both the retail and corporate sectors.
CEO perspectives
Ralph Norris, CEO, Commonwealth Bank of Australia
K. V. Kamath, Managing Director and CEO, ICICI Bank, India
Stephen Green, Group Chairman, HSBC Holdings plc, UK
Michael Smith, CEO, Australia and New Zealand Banking Group Ltd (ANZ), Australia
Shifting priorities
Before the credit crunch, the key risks facing banks centred on competitive pressures. Priorities have since shifted and banking and capital markets firms profess to being "extremely concerned" about the downturn. Their heightened concerns are understandable given that the fate of banks and corporations are largely intertwined.
With the sector having narrowly avoided disintegration last year, short-term survival has been uppermost in CEOs' minds and growth is understandably no longer the key issue. They have, where possible, sought to preserve capital. There is evidence that this will continue to be the case this year.
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New rules aheadA raft of new rules around capital adequacy, trading protocols, transparency and even compensation could be introduced in the wake of the credit crisis. And there is likely to be increased pressure from governments for continued lending to support businesses and consumers through the crisis.
Transforming the business model
Many banks have already started a reform of their entire business, looking at where and how they do business, what people and systems they employ, and adopting new approaches to risk and compliance. Some are even evaluating state-backed institution models as more appropriate in the long term.
Cultivating key skills
In a sector where the key differentiator is the quality, motivation and structure of the staff base, banks and capital markets firms are well aware that reform requires human resources reorganisation and re-engineering.
Bank CEOs are more likely than other sector leaders to believe they will suffer a shortage of skilled employees because of the inadequate integration of older workers, women and immigrants into the labour force.
Related research from PricewaterhouseCoopers
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12th Annual CEO Survey
Banking & capital markets
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