Bladewatch.com

http://www.finextra.com/news/fullstory.aspx?newsitemid=21974

A slew of new players, encouraged by government, are seeking to enter the UK market in the wake of the financial crisis. Metro Bank, the first new high street player for over 100 years, opened its doors recently and Tesco and Virgin are both looking to become full service lenders.

However, in a review based on consultations within the industry, the watchdog warns that these entrants face “significant challenges” in attracting customers and expanding their market share.

The OFT highlights technology as a key concern because entering the market involves “significant IT investment, often in the form of sunk costs, which can account for up to two-thirds of start-up costs”.

A great article, and I wonder how much of these start up costs are real or perceived, particularly with concepts of virtualization and cloud computing, granted there will be the standard security and compliance regulations to work within, but at the same time as a new entrant to the market, you might take advantage of the lack of legacy platforms, standards and ways of doing things.

Concepts like buying in your initial internet banking platform or framework, commoditizing the desktop and server model in which they are replaced every few years, or virtualized to reduce initial costs, combined with importantly the right range of technologies to provide what each department needs and not necessarily the concept of bank standards, if it’s a desktop with the banking applications and nothing else, is it a desktop running windows that I really need, or an imac with Firefox? Granted I could be accused of simplifying or being over enthusiastic, but the nature of the technological innovations and improvements that are out in the market place make achieving start-up business opportunities that bit easier, blogs, social media combined with a smart business plan and virtual call centers, virtual helpdesk make actually providing key banking services less expensive and less challenging than it might have been the case even a few years ago.

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