From the start of globalization, the key to survival and success for many financial institutions was to cultivate strategic partnerships that allowed them to rema🌠inꦛ competitive and offer diverse services to consumers.

But whether pursuing mergers, acquisitions, or the 澳洲幸运5官方开奖结果体彩网:diversification of 澳洲幸运5官方开奖结果体彩网:financial services, a financial inst꧙itution had to place its focus on, first, understanding individual clients' needs and expectations, and then, meeting both.

Let's take a look back at some driving forces of 澳洲幸运5官方开奖结果体彩网:globalization, how they increased opportunities to enhance financial services, and what that 💧meant for c🎉ustomers.

Deregulation and Globalization

1980s

In the early 1980s, the 澳洲幸运5官方开奖结果体彩网:Depository Institutions Deregulation and 澳洲幸运5官方开奖结果体彩网:Monetary Control Act of 1980 and the Garn-St. Germaine Depository Act of 1982 were passed.

By providing the Federal Reserve with greater control over 澳洲幸运5官方开奖结果体彩网:non-member banks, these two acts allowed banks to merge with thrift institutions (credit unions, savings and loans, and mutual savings banks) to offer 澳洲幸运5官方开奖结果体彩网:checkable deposits.

Deregulation started a major push for geographic diversification within the U.S. and beyond. Beginning in the early 1980s, a sequence of policy changes implemented a gradual reduction of intrastate and 澳洲幸运5官方开奖结果体彩网:interstate banking restrictions.

Deregulation also drove the🥀 dramatic transformation of the U.S. financial service markets, as demonstrated in 2007-2008, and the subsಞequent emergence of reconstituted players, new players, and new service channels.

1990s

Nearly a decade later, the implementation of the Second Banking Directive in 1993 deregulated the markets of 澳洲幸运5官方开奖结果体彩网:European Union countries. In 1994, European insurance markets underwent similar changes as a result of the Third Insurance Directives of 1994.

These two directives brought the financial services industries of the United States and Europe into fierce competitive alignment, creating a vigorous global scramble to secure customers who previously had been unreachable or untouchabꦇle.

The United States continued to legislate financial deregulation, concluding with the Financial Services Modernization Act, also known as the 澳洲幸运5官方开奖结果体彩网:Gramm-Leach-Bliley Act of 1999. Among other things, this law allowed for the consolidation of major financial players.

Geographic Diversification

Deregulation was also a major factor behind financial institutions' expanding reach. Beginning in the early 1980s, a sequence of policy changes implemented a gradual reduction of intrastate and interstate banking restrictions.

In the European Union, a similar counterpart of policy changes e♛nabled banking organizations and certain other financial institutions to extend their operati🔜ons across the member-states.

Latin America, the transitional economies of Eastern Europe, and other parts of the world also began to lower or eliminate restrictions on foreign entry, This enabled multinational financial institutions headquartered in other countries to attain considerable 澳洲幸运5官方开奖结果体彩网:market share.

Changes to Asian Markets

Asian markets joined the global expansion movement in 1996 when "Big Bang" financial reforms brought about 澳洲幸运5官方开奖结果体彩网:deregulation in Japan. Relatively far-reaching 澳洲幸运5官方开奖结果体彩网:financial systems♛ in that counไtry became competitive in a global environment that was enlarging and changing swiftly.

By 1999, nearly all remaining restrictions on 澳洲幸运5官方开奖结果体彩网:foreign exchange transactions between Japan and other countries were lifted. Japan was also soon to emerge from its "澳洲幸运5官方开奖结果体彩网:Lost Decade" of real estate crises and low annual GDP rates. (For additional background on Japan, see 澳洲幸运5官方开奖结果体彩网:Crashes: The Asian Crisis.)

Effects of Deregulation

The immediate effects of deregulation were increased competition, 澳洲幸运5官方开奖结果体彩网:market efficiency and enhanced consumer choice.

Deregulation sparked unprece𝄹dented changes that tran﷽sformed customers from passive consumers to powerful and sophisticated players.

Studies also suggest that additional, diverse regulatory efforts further complicated the running and managing of financial institutions by increasing the layers of bureaucracy and number of regulations. (For more on this topic, see 澳洲幸运5官方开奖结果体彩网:Free Markets: What's The Cost?)

Following deregulation and prior to expanding their U.S. and global reach, 澳洲幸运5官方开奖结果体彩网:financial institutions essentially operated in their own markets, targeting audience with a narrower choice of services, and catering to the demands of a unique mix of customer segments.

Deregulation forced financial institutions to prioritize their goals by shifting their focus from rate-setting and transaction-ꦆ꧟processing to becoming more customer-focused.

The Transforming Effect🍸 of Technological Innovation

Transactions Without Borders

ATM networks and banking websites enabled efficient long-di༒stance interaction between institutions and their customers. Consumers came to expect boundary-less financial transact♉ions on a continuous basis.

The growing technological revolution of the internet changed♚ the nature, scope, and competitive la✤ndscape of the financial services industry, as well. The ability of business entities to use the internet to deliver financial services and offer transactional services to their clientèle also impacted the product-oriented focus and geographic diversification of the financial services arena.

Businesses that failed to innovate to mee🌺t the expect♛ations of customers stood to lose their business and their own competitive standing.

Economies of Scale

Innovations in communications and information technology also resulted in an improvement in 澳洲幸运5官方开奖结果体彩网:economies of scale associated with business costs fa🍌ced by financial institutions con♚templating geographic expansion.

For example, between 1985 and 1998, the average distance between a main bank and its 澳洲幸运5官方开奖结果体彩网:affiliates within U.S. multibank 澳洲幸运5官方开奖结果体彩网:holding companies increased by more than 50%, from 123.4 miles to 188.9 miles. This indicates that the increased ability of banks to make small business loans at greater distances enabled them to suffer fewer 澳洲幸运5官方开奖结果体彩网:diseconomies of scale and boost productivity.

Financial Institution Consolidation Strategies

An additional driving force behind financial service firms' global diversification was the proliferation of corporate combination strategies such as mergers, acquisitions, strategic alliances and 澳洲幸运5官方开奖结果体彩网:outsourcing.

Such consolidation strategies were expected to improve efficiency within the industry, resulting in more M&As and the voluntary exits or fo𓄧rced🏅 withdrawals of poorly performing firms.

Targeting Lower Costs

Consolidation strategies also empower firms to focus on lowering their unit 澳洲幸运5官方开奖结果体彩网:production costs. Firms often publicly declare that their mergers are motivated by a desire for revenue growth, an increase in product bases, and increased 澳洲幸运5官方开奖结果体彩网:shareholder value. This is supposed to occur via staff coꦐnsolidation, overhead reduction, and the avai꧂lability of a wider array of products.

However, the main reason for and value of sꦯuch strategy combinations are often related to internal cost reduction and increased productivity.

Unfavorable facts about the advantages and disadvantages of the major strategies used for geographic expansions within the financial services sectors were obscured in 2008 by the very high rate of M&As, such as those between Nations Bank and Bank of America (BAC), Travelers Group and Citicorp (C), JP Morgan Chase (JPM) and Bank One. Their dilemma was to create a balance that maximized overall profit.

The Bottom Line

With the onset of globalization, the survival and success of many financial service firms lay in understanding and meeting the needs,♒ desires, and expectation♐s of their customers.

To o🐼perate successfully in extended 🎉global markets, financial institutions had to serve discerning, highly sophisticated, better educated, more powerful consumers addicted to the ease and speed of technology.

It's as true today as it was then. Financial institutions that fail to recognize the impact of business transformations will struggle to survive or cease to exist. The global financial services community has been forever altered by deregulation, new technologies, and other 澳洲幸运5官方开奖结果体彩网:fundamental changes.