The latest presentation at the CAGT was on the topic of Canadian Indebtedness.  This of course in the week that the debt to income ratio exceeded 160%.  Certainly of concern.

When wrapped up with potentials for oil shocks, the fiscal cliff in the US and any further economic stress impacting us across the border this will be an ‘interesting’ 6 months.

Able to attend a presentation on the outlook of the global economy via CGMA/AICPA/CIMA.

Interesting that optimism over the global economy seems to have dropped over the last couple of quarters.  Really seen as a crisis of confidence rather than embedded in the fundamentals, the world is in a wait and see mode.

Couple of interesting comments and potential event drivers discussed to watch.

• US election and the ‘fiscal cliff’
• Metal production,  an indicator of growth and investment, is down
• Demand in Southern Europe is soft, Northern Europe has been holding up
• Growth in emerging markets
• Increased importance of energy costs and interest rates on inflation

Things to watch.

Reading a couple of thought provoking articles in the Economist around retail banking.

The retail branch network has always been seen as a significant cost (I remember the consolidation and branch reductions in the UK during the ’80s).  However there are trends underway that could subtly change the way we think of and interact with our high street branch.

In “retail renaissance“, it explains how online internet banks, whilst showing great promise in the early 2000s, have been less of a threat than expected for retail banks.  Many have been folded into their bricks and mortar cousins and in fact numbers of retail branches have increased by 10-20% in the same time period.  A physical presence has been a key driver of customer growth.

Why do customer still like having a branch… “Branches continue to thrive because people still think that money is special and want reassurance that their cash is safe”.

However, there are significant changes happened underneath in the branch network.  Explained in the article “withering away“.

Much of the old banking infrastructure was designed to handle large volumes of cash safely.  As we increasingly migrate to forms of electronic payment (inc cell phones, a further discussion) this factor is increasingly become less relevant and change is in the pipeline.

What will the future hold?   Maybe the cell phone or apple stores give us a clue.

• Smaller footprint stores, with much of the services handled automatically.
• Cash machines for deposits/withdrawls, secure terminals for more complex transactions
• An open, bright and modern environment.
• Staff in store to help with transactions , handle exceptions and provide expert advice.

This centralizes the infrastructure and control, reduces cost (less staff, smaller footprint) yet with the right staff (think apple geniuses) enhance customer interaction…..essentially the physical face of the online bank.

In the end I am not sure who has merged with who (online or retail), however it will be interesting to watch how this develops.