When Boston-based Capital Crossing Bank announced to analysts in the first quarter of 1999 that it would enter the online banking game by the third quarter, it didnt turn to any young, Web upstart like Scient or USWeb/CKS to kick-start its cyber initiative. Instead, the New England bank, which has $567 million in assets, chose Andersen Consultinga global stalwart known more for delivering astute management consulting advice to blue-blooded bricks-and-mortar companies than providing cutting-edge Internet solutions.
One hundred days later, Capital Crossing, formerly known as Atlantic Bank, had joined the jet set of the online banking world, delivering its products through a new electronic channel.
They had a real handle on e-commerce, Richard Wayne, president and co-CEO of the bank says of Andersen, which he was introduced to by the banks law firm.
We talked to Andersen about what we wanted to do. We were looking for someone who was up to speed on online banking and it was clear they were.
Wayne says what sold him on Andersen was the depth of their relationship with vendors, particularly banking technology firm S1 Corporation, with which Andersen has a partnership.
After meeting with more than 10 partners, each versed in some aspect of e-business, Wayne says there was a high comfort level, which prompted the bank to choose Andersen and Capital Crossing hasnt been let down.
I was impressed by their speed and ability to balance tactical versus strategic decisions and to leverage resources and vendor relationships to mobilize quickly.
Allen Wolpert, managing partner for technology in Andersens financial services practice in New York, says speed is the key in the e-commerce world. We helped them get on the Net with a very robust offering in just over 90 days.
Big firms ramp up
At a time when the dot-com consulting firms are enjoying inflated stock prices and glowing headlines, professional service consulting giants like Andersen, PricewaterhouseCoopers, KPMG, Deloitte Touche Tohmatsu and Ernst & Young have been equally busy transforming their own consulting practices into e-business firms. They are busy training existing staff, ramping up with fresh faces and building alliances and affiliations in a bid to cash in on the expected business-to-business e-commerce boom. This is particularly true for their financial services practices, which generated a large chunk of their revenues.
We think a very significant percentage of all consulting going forward will be in this space, says Adam Schneider, head of financial services e-business at Deloitte Consulting in New York.
The consulting giants are well positioned to capitalize on the cyber business craze. Thats because, Andersen aside, they leverage links to their audit practices and wedge open the management consulting door, which has raised some concerns about conflicts and auditor independence with regulators. (In Andersens case, the consultants had a falling out with their accounting firm cousins at Arthur Andersen, which now has its own consulting arm, prompting the need for an arbitrator to step in and sort out the mess. A decision is expected in the New Year.) However, PWC is another matter. In early January it was discovered that many PWC partners were allegedly not following the rules they established concerning restrictions on investing in audit clients businesses. More than half of the partners were found to have holdings in their clients companies.
Despite these issues, financial services consulting spells opportunity and chances are most banks, brokers and insurers will seek cyber advice from one of the consulting giants in the future.