This is my first Catalyst Code blog entry. I first want to say how excited I am to be joining my friends and colleagues at Market Platform Dynamics at a time in financial services when the only thing we can depend on is change. Just looking back on the four weeks since I stepped off the Wells Fargo wagon makes my head spin;

WAMU, National City, Merrill Lynch, Lehman Brothers and Wachovia vanished.
The Feds invaded bank balance sheets, boardrooms and compensation plans
American Express and PayPal announced lay-offs

When the dust clears, what will we see in the rear view mirror and in the road ahead? We’ll see the banking industry’s watershed moment of our lifetime; the meeting in Washington four weeks ago when Hank Paulson “invested” $250 billion in Federal capital onto the largest banks’ balance sheets.

The biggest losers? The Wells Fargo shareholders. Why? Because through a steadfast centering of service on its consumer household relationships, Wells Fargo had built the most balanced business in banking and had earned the position to literally and figuratively clean-up while its lesser peers staggered. Had the free market been allowed to messily and freely correct itself, Wells Fargo would have emerged as the greatest financial services company, not just one of the survivors. Its employees and shareholders would have been justly rewarded. Instead, the wealth was spread around, propping up and unjustly enriching lesser managed institutions.

What lies ahead? Once again, we need look no further than the Washington meeting. When Dick Kovacevich told Hank Paulson that Wells Fargo didn’t need Federal money, the industry asked, “What did Wells do to put themselves in that position?” The answer is the new paradigm for banking in America and is clearly what lies ahead.

Simply put, the Wells Fargo strategic vision of the past twenty years has been consistently centered around “doing it right for the customers”, leading with deposit relationships, delivering services when, where and how the customers want them, and cross-selling everything to each banking household; cards, loans, mortgages, insurance and investments. The center of this old new paradigm is the “banking household”. A “banking household” is defined as one in which the primary transaction (DDA) account resides with Wells Fargo.

Simple as it may sound, banking has come back to basics and the basic foundation is deposits; relationship banking grounded in a DDA; balanced banking balance sheets; simple; logical; sound. The new paradigm.

The impact? Fewer cards in your wallet, fewer “favorite” financial services links on your computer, and a more rewarding, more personal and more valuable relationship with your bank.

Coming from this background, it is no wonder I feel at home with my new Market Platform Dynamics colleagues. At MPD, the new paradigm is old hat. We are in the business of relationships and are focused on bringing people and markets together in ways that meet their respective needs in new and exciting ways, where, when and how they want them. It’s great to be here. I hope you’ll all visit us often.