There are a couple of interesting tidbits in the news today that illustrate the choices that banks currently face in deciding how to scope their activities.

• Reduce scope:  Right here in my hometown of Cleveland, OH, KeyCorp has agreed to sell McDonald Investments to UBS for around $280 million.  As the article points out, Key will continue to provide a number of investment services, and will retain some of the operational capabilities that it acquired with McDonald.  However, KeyCorp's move clearly indicates their belief that retail advisory and brokerage services should not be a core component of their value chain.  UBS, however, is cited as a better "strategic fit" for a strong regional player like McDonald, as UBS "is dedicated to providing the necessary capital, technology and management resources required to expand this organization," according to Key Chairman and Chief Executive Officer Henry Meyer.
  
• Increase scope:  On the other side of the planet, Kiwibank's New Zealand customers can now take advantage of a wide range of international accounts and services, such as cross border funds transfers, trade services, foreign currency accounts, and forward contracts.  Did Kiwibank invest massive capital to build these offerings organically?  No, Kiwibank used the concept of open architecture by partnering with Citigroup to offer these services thru Citi's "Cross-Border Payment Solutions for Banks."  Technology's role is paramount in an offering like this.  CitiDirect(R) Online Banking is the underlying, web-based delivery platform for these types of services, providing Citi with an excellent channel for getting more value out of their global financial network, while allowing regional institutions to "look small but act big" by providing a range of services that would be infeasible to build organically.