Michael Draeger, who specialises in consulting to banks on the euro, is concerned about the progress made in the banking sector regarding the euro. He says that even though wholesale banking sector euro projects are entering their final stage, the focus in most banks is only on ensuring that the IT systems are "euro compliant", and that the banks are able to open for business for the launch of the euro in electronic form on January 4th 1999. Draeger believes that important business issues are currently being neglected.
For example:
- many organisations are deferring redefinition of investment and trading portfolio strategies until after the dust settles in 1999
- there are no defined activities in EMU project plans for attacking market sectors on a pan-European scale
- others are opting to add products and services denominated in euro to their existing palette, rather than developing entirely new offerings.
Such a minimalist approach to the introduction of the euro means that, for many organisations, euro business projects will continue right through 1999. By deferring pro-active planning in 1998, they will be in a re-active mode within a new competitive landscape in 1999.
Moreover, in a number of banks, senior business managers are failing to closely control euro projects, so that in the resulting vacuum important decisions are being taken by IT and Euro project managers on behalf of senior business managers.
Draeger's conclusion is that, come the advent of the euro, there will be a wide disparity in preparedness between banks. In January 1999, both correspondent banks and corporate customers would be well advised to identify which banks are truly prepared to compete in the post-1.1.99 world and which have just managed to limp to the starting block.
