Study Group: Digital Insight Experts

GLG News^SM Analyses by this Study Group's Leading Experts(?)

Citigroup: Will Breaking Up Be Hard to Do (Well)?

January 15, 2009

Analysis by:Bill Bradway, Founder & Managing Director,

Analysis of:Citigroup Plans to Split Itself Up, Taking Apart the Financial Supermarket | www.nytimes.com

Citigroup, still suffering from credit related losses, is now planning to spin its Smith Barney unit into a joint venture with Morgan Stanley. Other Citigroup business units are rumored to be on the block for divestiture. Government regulators appear to be forcing this action to happen sooner rather than later. Can Citigroup succeed at breaking up its financial supermarket? Is this the end of the financial supermarket model for all big banks?

There Are 814 Good Reasons For A Bank To Switch To A New Core System. One Is Usually Enough.

October 20, 2008

Analysis by:Art Gillis, President,

Analysis of:Despite Tons of Talk Banks Don't Upgrade | www.americanbanker.com

As long as the de novo movement continues, there will be new core sales.  Last year, 39% of new core sales were to de novo banks. In my opinion, there are 1,280 FIs that are ripe for a better core system and the only way they’ll get it is if vendors commission Buffett/Gates sales types to make it happen.  Waiting for a brand new core system to make it happen, the likes of which the ten offshore companies sell everywhere else but the U.S., will only result in disappointment.  Bankers buy functionality, not architecture, and today’s top U.S. systems have more functionality than the economy has bad news.  In fact, some of that functionality (for example, Risk Management) helps to skirt the reasons for economic bad news.  And remember, I’m not a salesman.  I show up after the bank CEO bites the bullet to replace the core.  With so many other bullets that bankers are dodging these days, I don’t expect I’ll get many calls.

Time to Say Goodbye to the Old American Mortgage Pie?

July 14, 2008

Analysis by:Bill Bradway, Founder & Managing Director,

Analysis of:U.S. Weighs Takeover of Two Mortgage Giants | www.nytimes.com

The news that Treasury Secretary Paulson and Fed Chairman Bernanke are trying to reassure the broader markets that Fannie Mae (FNM) and Freddie Mac (FRE) will not be allowed to fail has not produced the expected calming effect on the markets. Shares of both firms have plunged into single digits. Who would have thought that FNM and FRE would become disastrous ticker symbols whose survival is now being debated? The full faith and credit of the US government is being tossed out as a lifeline, if necessary. Whom would such a lifeline rescue? What will happen to mortgage products, origination – packaging – servicing business models, and the overall housing market?

Delinquencies Sprout Like Weeds: Time For a Pain Check

June 6, 2008

Analysis by:Bill Bradway, Founder & Managing Director,

Analysis of:Delinquencies and Foreclosures Increase in Latest Mortgage Bankers Survey | www.mortgagebankers.org

Adverse news continues to sprout headlines describing the expansion of delinquencies into new corners of the US bank and thrift loan portfolios. The Mortgage Bankers Association reported that 1Q2008 mortgage delinquency and foreclosure rates continued to expand abovemuch 4Q2007 levels and are now much higher than 1Q2007. How many forced transactions (e.g., Countrywide - Bank of America) or outright failures are likely? Which institutions are inching closer to the edge of extinction?

HP and EDS - Is it a Win-Win? I Predict a Lose-Lose

June 6, 2008

Analysis by:Art Gillis, President,

Analysis of:HP to Acquire EDS for $13.9 Billion | www.hp.com

My experience with EDS goes back to 1962, not because it was day one for EDS, but instead, to tell you how bad I am at predicting success stories.  What I’m good at is predicting failures. 

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