US regulators and some politicians seem to be missing the real story in American banking. Blocking mergers and higher capital charges were the key financial questions fired at the chief executive officers of seven US megabanks by congressional committees this week — when financial issues got a hearing amid the more nakedly political grilling anyway.
But what’s going to be far more important for the future shape of the banking industry is technology. The biggest banks, with the greatest profits, are already investing vastly more in faster, cheaper, easier-to-use digital apps than smaller banks can afford. Technology is helping big banks gain market share and is more likely to drive consolidation in the years ahead than regional bank mergers.