[Posted by Ed Kountz]
On the regulatory front, another ominous sign for the financial services industry, with likely impact on e-Business strategists. President Obama today proposed a massive overhaul of the nation’s fiancial system, as an essential regulatory cornerstone for the future and to ensure that the factors underpinning the economic crisis are not repeated.
His changes would create a new consumer protection watchdog to prevent credit and financial practices deemed abusive, and increase the strength of the Federal Reserve with monitoring and oversight responisibiltiies to include new areas of the financial system. New simplicity requirements for consumer loan products would be among the changes enforced.
While increasing the powers of the Fed, the President’s plan would eliminate the Office of Thrift Supervision in favor of a new system. That new system would have broader powers, and would serve as the ueber-regulator for institutions, eliminating accountability gaps the president said led to the current crisis.
Under Obama’s plan, the Federal Reserve would gain power to supervise holding companies and large financial institutions considered so big that their failure could undermine the nation’s financial system. But even as it gained new powers, the Fed would lose some banking authority to the new Consumer Financial Protection Agency.
Obama’s proposal would require the Federal Reserve, which now can independently use emergency powers to bail out failing banks, to first obtain Treasury Department approval before extending credit to institutions in “unusual and exigent circumstances.”
The specific areas of impact on eBusiness marketers will become clearer in the coming months, as dialogue on the new structure advances. But there is sure to be impact in key areas, as marketing and customer support efforts adapt to whatever stricter structrure emerges. What is clear now is, that, while cost-efficiencies can still be wrung out of the process of online migration and right-channeling, bigger picture is of the need to adapt products and brand positioning to the actual needs of customers, adding value in ways that are more personal and relelvant, and less-grounded in the products-first mentality of the past few years.