As we head into the last months of 2009 it seems that the economic turmoil which has influenced the first part of this year is beginning to abate. Uncertainty is being replaced by cautious anticipation that the upturn will come. Companies which have survived so far are beginning to come out of survival mode and starting to address the strategic issues they face. GFT’s research earlier in the year took a Europe-wide view of challenges facing the banking sector and identified varying degrees of competition, consolidation and the need for cost-efficiencies. In the UK we have also added the impact of compliance to this list. To meet these challenges, financial institutions are searching for examples of good practice amongst the chaos. Although the smaller banks in Spain have been at the mercy of their formerly loose lending practices, the larger institutions have posted positive, upbeat results for Q2 and Santander is efficiently merging three UK building societies. With its core southern European development centres in Barcelona, Valencia, Zaragoza and Madrid, GFT is wellplaced to pass on the lessons of the Spanish success. We have already identified regulation, risk management and effective investment in new technology, as areas where large Spanish banks have excelled and their UK counterparts could improve.

GFT has long argued that innovation is the way for astute companies to navigate their way out of recession. This can mean new technology or new business ideas, and flexible resourcing is one such innovative solution. It allows businesses to respond to the demands of the economic cycle and changing technology through a third-party managed, European-wide, pool of flexible workers. This sort of innovation could help solve the problem of balan-cing fixed headcount with the work to be done.

Although we may not yet be in calmer waters, the instability has ceased and we can now begin to think about steering a steady course for the future. 

Yours sincerely

Graham Underwood