Payments continues to be an interesting area to follow in the evolution of banking. Unfortunately most banks have forgotten the importance of this bank product leaving the field open to competitors who have been creating substantial value for their stakeholders. But it appears that this traditional neglect by mainstream banks that tended to favour the more “sexy” investment banking activities is starting to shift.
The latest example of this shift is with Deutsche Bank as reported in the Financial Times. Of interest is that Deutsche Bank sold a portion of its payment business to a non-bank entity earlier in 2012. It did so at a time that Deutsche appeared to be earning high returns in investment bank (subsequently seen not to be real returns) and a view that payments were risky (as if investment banking has not been risky for Deutsche).
But of course the question for Deutsche and other banks is: Are they too late to the party?
