Despite the enthusiasm for the financial supermarket in the early 1980s, by the end of the decade the concept had stagnated, and the press instead reported the benefits of specialization and the provision of niche services. I believe this past experience with business conglomerates in the US should temper our views of the inevitability of today’s financial conglomerates.
There are clearly challenges to managing much larger, more diversified firms, as well as benefits. This business strategy is surely not for all financial services firms. Business Conditions Necessary for Financial Conglomerates to Succeed The difficulties associated with operating a financial conglomerate are suggested by the business conditions that are necessary for such a conglomerate to succeed.