One positive outcome of the credit crisis, is hat Banks will be required to actually offer something different in order to attract and retain customers. This from the Financial TImes notes the level playing field that existed while small, new (and undercapitalised) Banks were able to comoete with large banks on the basis of free flowing cheap credit.

Those days are long gone, with credit expensive, and liquidity dried up.

These had the effect of levelling the playing field between large, financially strong financial institutions with large reservoirs of retail deposits to fund loan growth and smaller, upstart banks that were able to fund expansion by raising funds in the wholesale markets.

There were also some large banks – especially in the UK – that exploited the funding potential of the wholesale markets.

So what else can a bank compete on … service, and differentiated customer experience perhaps.

Relevance to Bankwatch:

A crisis is the ideal time to rejuvenate strategy. It will be interesting to see which banks grasp the opportunity to focus on customer engagement through dramatic improvements in online, mobile, and cross channel services.