Old Friends and Places – Fresh Perspective
As I return from another journey across the pond to London, I ponder this past year and what lies ahead. After visiting Windsor Castle with my old friend and colleague Jim Firn, recently retired from Russell Investments as their European counsel, I got to thinking about the past and the future. A day visit to Cambridge University sharpened that focus and provided perspective. Two of the good things about Europe are its rich history and amazing architecture. The architecture of their banking system is instructive as well. As we slide below 7,000 banks in the U.S. and think of it as consolidation, they have but a handful of giant banks in each of the various European nations.

Whither Our Banking System
Reflecting on the half dozen bank sales we have completed or are pending during the past two years, makes me realize that unintentionally we have played a role and served as an instrument for what I sense is our government’s desired result of consolidating and shrinking the banking system. Whether this is good for our economy or customers is unclear. I believe strongly that competition fuels quality, service and pricing. One of my concerns is that over time the dual banking system will be in real jeopardy in some states. The thought of some monolithic federal banking regulator scares the heck out of me. Too much power in the hands of a few is always a bad thing, leading to potential unchecked abuses.

Our Firm’s Merger
As I write this Cyber-Graham, I am contemplating the pending merger of my own firm with Portland-based Miller Nash. What is happening in the banking industry also is happening in the legal and other industries as well. I am excited about the new resources and opportunities that our merger offers. But like any merger, it creates challenges and changes. It is interesting to be a participant in what we do for a living – M&A. It is a strange turn of events that makes me appreciate the process from a different perspective and will enable me to assist clients even better in the future. I also ponder whether we will continue to call my missives Cyber-Grahams post-merger or not. For better or worse, Cybers have been a product of my vivid imagination. Please share your thoughts.

The World As We Know It
It is really hard to predict what the banking landscape, particularly in the West, will look like even as soon as 2020. It’s really not that far away. But to be clear, there will be fewer banks with the exact number problematic. There will continue to be what I call “reconsolidation” and new players rising in the market. I also think, whether we like it or not, credit unions will play a more prominent role, as well as other non-traditional financial service providers, such as Walmart, Google, Amazon and Apple.

The Uncertain Future
What can we make of all of this consolidation and change? There will be opportunities for some, unacceptable challenges for others. And, there always will be survivors – those with a vision, a plan, good execution and, of course, a little luck. As the famed football coach Vince Lombardi once said, “Luck is when opportunity meets preparation.” Personally, I look forward to the challenges and opportunities presented by my new firm and by the banking industry as 2015 rapidly approaches.