21
" Captain Renault: I’m shocked, shocked to find that gambling is going on in here! [a croupier hands Renault a pile of money] Croupier: Your winnings, sir. Captain Renault [sotto voce]: Oh, thank you very much. Captain Renault [aloud]: Everybody out at once! CASABLANCA, Warner Bros, 1942 We were all appalled and shocked when we heard about these allegations yesterday. I have to tell you that I am sickened that these events are alleged to have happened. Not just because I was editor of the News of the World at the time. REBEKAH BROOKS, chief executive, News International, in a memo to staff, 8 July 2011 After "
― , Other People's Money: The Real Business of Finance
25
" The payments system is the heart of the financial services industry, and most people who work in banking are engaged in servicing payments. But this activity commands both low priority and low prestige within the industry. Competition between firms generally promotes innovation and change, but a bank can gain very little competitive advantage by improving its payment systems, since the customer experience is the result more of the efficiency of the system as a whole than of the efficiency of any individual bank. Incentives to speed payments are weak. Incrementally developed over several decades, the internal systems of most banks creak: it is easier, and implies less chance of short-term disruption, to add bits to what already exists than to engage in basic redesign. The interests of the leaders of the industry have been elsewhere, and banks have tended to see new technology as a means of reducing costs rather than as an opportunity to serve consumer needs more effectively. Although the USA is a global centre for financial innovation in wholesale financial markets, it is a laggard in innovation in retail banking, and while Britain scores higher, it does not score much higher. Martin Taylor, former chief executive of Barclays (who resigned in 1998, when he could not stop the rise of the trading culture at the bank), described the state of payment systems in this way: ‘the systems architecture at the typical big bank, especially if it has grown through merger and acquisition, has departed from the Palladian villa envisaged by its original designers and morphed into a gothic house of horrors, full of turrets, broken glass and uneven paving.’6 "
― , Other People's Money: The Real Business of Finance