Letter From The Editor

In some ways, yes, things continue to track. UBS is expanding its already massive trading room in Stamford. New, bigger, better trading floors are getting built in London by the likes of Merrill, Goldman, HSBC, Enron, etc.

But then, cast an eye on Dresdner Bank’s decision to spin off its IT department. Or take a look at the many efforts in progress to repackage or reuse legacy processing systems. I know of at least one global financial services firm that’s planning to spin its own off altogether. The result: less bulk, more flexibility and a return to core competencies.

In some cases, the changes are more subtle but equally transforming. The efforts underway at the two investment banks we profile in this issue might not seem terribly bold on the surface, but they represent the evolution of the investment bank as we know it. Donaldson, Lufkin &Jenrette and Dresdner Kleinwort Benson have built enterprise-wide initiatives to nurture and develop their online efforts, with additional responsibilities to secure consortium partnerships and identify and invest in firms with promising technology.

Neither firm has built these online divisions as separate companies; instead, the divisions coordinate and drive enterprise-wide efforts and act as facilitators for the underlying businesses. In fact, both firms still depend on those businesses for innovation and product development. After all, who better to e-enable services for the business than the businesses themselves?They can build online services to better serve their customers while lowering operating costs, increasing efficiency and hopefully attracting new clients. DrKB’s online efforts already have, says global head of e-commerce Achilles Macris.

Meanwhile, these overarching e-commerce divisions can establish the underpinnings (hosting services, network providers, etc.) while letting the businesses get on with the development work. At the same time, these divisions can coordinate the individual development efforts to ensure integration.

For the heads of e-commerce, there are no sure things. Maybe that’s why firms are recharting their courses based not on some pre-existing model but rather on the unique elements that have made them successful in the past.