Globalization is a term whose meaning has become both more complex and more diffuse — at the same time, more generic and more pejorative. For some, it's a dirty word that is all about the domination of powerful nations and powerful corporations, at the expense of local cultures and businesses. For others, globalization means growth, opportunity and freedom. For banks, the word embodies both promise — new markets and customers, and expanded resources for employees and partners — and risk, whether it's political and economic risk, an increasingly strict and punitive body of regulation, or the operational challenges of extended platforms, systems and products beyond their core markets.
Twenty years ago the concept of banking globalization specifically meant expansion into different countries -- planting the flag, so to speak. That is still a big part of the proposition today, but it also involves tapping into a global workforce; adopting channel and delivery strategies from different markets; and the emergence of new and dominant financial services centers such as Dubai, Sao Paulo and Mumbai that for a variety of economic, infrastructure and technology reasons conceivably could supplant the historical centers of New York and London.
Most dramatically, the financial crisis of 2008-2009 — along with the current European sovereign debt/euro crisis, highlighted by the collapse of the Greek economy and contentious efforts of the E.U. countries to deal with the problem — illustrate how interconnected our world and especially our financial systems are. It's gone far beyond diplomat Prince Klemens von Metternich's famous dictum, "When France sneezes, all Europe catches a cold." Developments in any country or region — whether large or small, developing or mature, democracy or dictatorship — can affect the health of financial institutions anywhere in the world.
It's this interconnectedness that Bank Systems & Technology is exploring in the March issue's special report on 3 Steps to Building a World-Class Bank. Whether it involves establishing a scalable global operations model; understanding the technology implications of new financial services regulations; or identifying global growth opportunities by region or customer segment, globalization is integral to almost any financial institution in some way. But it also is a constantly evolving concept that presents critical financial, technological and strategic challenges to management. With the whole world as your potential market (and potential competition), this should shape decisions about everything, from core systems to risk management to social media. Or, as Prince Metternich also said, "Stability is not immobility."