I would say that it has affected competitiveness in a positive way. No matter if they are costing out to serve an internal audience or pricing products for an external audience, banks are operating more efficiently today.

The evidence doesn't really show that operations have been impacted over the long term. I don't think anybody got severely penalized when bank earnings were down a few years ago. Now that earnings have come back, I think spending on technology will increase.

In terms of consolidation, application of technologies such as imaging, both for file folder and check processing applications, has the potential to deliver better service at a much lower unit cost.

I would pose it in a much more positive way. The banking industry is coming to grips with its expense structure, and that will ensure its long-term competitiveness. We have a very tight handle on expenses, and I think all organizations, not only those in banking, have come to appreciate the need for this sort of activity.

But cost reductions are not the end goal, but rather part of an on-going process.

You need place the customer at the front of whatever it is you're doing, whether it's providing information to customers at the branch level or supporting your employees. That's how you bring costs down and improve efficiency. Those things are not mutually exclusive.

I think it depends on how the cuts are implemented. It's inappropriate to make across-the-board cuts. But it is possible to cut expenses and increase the quality of the product you provide.

The bottom-line requirement involves you to rethink your processes and how to work smarter. The commitment to your customer should be what drives improvements in quality. That might require you to actually spend more, rather than less, in a particular area.

You have to fund investments on a case-by-case basis. But you have to be willing to invest to achieve desirable long-term operational levels. if you take the myopic view, you end up eating your seed corn.

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