[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]
This year's keynote presentation was by Peter E. Raskind, President and CEO of National City.
The topic was supposedly "Executing Payment Strategies in a Changing
Environment" but it sounded a lot like an infomercial for National
City. I tuned most of it out, but the Q&A was quite interesting.
Q&A with Peter E. Raskind, National City
There were many questions about subprime housing and the credit crisis and regulatory response. Raskind
expressed faith in the free market, and emphasized that the industry
"must do the right thing in a timely manner" or regulators will step
in. One questioner cited a recent Economist article advocating a "countercyclical" approach to bank regulation
(building reserves during good times in anticipation of the eventual
bad times) and Raskind agreed that a more modulated measurement of
capital adequacy (a sliding scale based on bank risk profiles) rather
than a binary threshold makes sense.
With regard to banking competition
(and consolidation, in particular the Chicago market) Raskind stressed
that banks must focus on execution in order to earn the right to
survive. Raskind acknowledged the "real fear" of bank disintermediation by PayPal, Google Checkout, telecoms and mobile startups. He
characterized the access to payment systems for consumers and
businesses as the last great franchise left to the banking industry and
an enormously profitable one. He said that the competitive threat is relevant and of enormous concern. Banks
must "earn their customers business by providing safe, reliable access
to payments at competitive cost."
He endorsed the consolidated payments hub concept, but did not
think it would come to fruition in during the course of his career.
He believes that mobile payments are a viable
substitute for currency, particularly small value transactions, but
predicted a more glacial rate of mobile adoption rather than cataclysmic change.
Raskind deferred that representatives from BofA and Wells Fargo would be
better positioned to comment on their recently announced plans to consolidate their ACH processing, but did wonder about the two banks' ability to differentiate their brands with their customers.