This is why the banks are in a mess – and other businesses too

Goldman Sachs has announced today that it is “thinking about” running an Internet bank. Hang on a minute – I thought they were a bank. Indeed, their web site says, for instance, “Goldman Sachs offers comprehensive wealth management services, including private banking products and services, to our high net worth clients around the world.”

So, how do you do that without an online bank? After all, high net worth individuals are usually busy, they frequently use high-tech solutions and they want their suppliers to be up-to-date.

Goldman Sachs is demonstrating clearly with this announcement how out of touch it is with the real world. The first Internet banking transactions took place in October 1994 in New York at the Stanford Federal Credit Union. However, computer based banking started in 1981. So there’s 27 years of history of this technology – why is Goldman Sachs so slow?

No doubt the company could argue they are not a “retail” bank and therefore have no real need for online banking. Maybe. But their tardiness indicates what is wrong with so many companies in the traditional business sectors. Their adoption of new technology is woeful. And that could well lay behind many of the business failures we are currently seeing. Many companies think they are “go ahead” when in fact, mentally, they are still in the 19th Century.

If you run your own business or want to keep your business alive during the coming recession you need to be right up-to-date. That means:

  1. Focusing your entire business operations online – make the Internet central to your company, not a sideshow
  2. Keeping up-to-date with changes to the Internet – make it a priority to attend technology events and follow technology blogs
  3. Actively taking part in social networking sites – who you are connected to online now means a great deal of difference in terms of your likely success
  4. Adopting a rapid method of changing things – no more committees, investigations or reports, action is what you need

No longer can you afford to sit on the sidelines and take things one step at a time. And you certainly can’t go the way of Goldman Sachs and wait 27 years before you “consider” doing something.

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