How far can the private-label envelope be pushed?

That’s the question I ask myself when thinking about the future of wholesale banking.

Bankers have historically walked a wholesale-banking tightrope. On the one hand, the nation’s largest banks have sought to serve their wholesale clients absolutely. In fact, the need for profound wholesale banking was one of the arguments against nationalization of the largest US banks at the height of the credit crisis.

Yet, banks have actively sought to minimize encroachment on their turf by non-banks. The last 20 years of banking history is littered with knockdown fights over non-banks getting into financial services, with in nearly every case, the first punch thrown by the banking industry.

There are notable exceptions, of course, with private-label credit card lending being the most prominent among them. But the private-label machine largely stops pumping at credit cards. I see opportunity here. With bank brands in the dog house, it makes sense for bank wholesale banking units to think more creatively about selling financial services products through a proxy.

This goes well beyond an equipment leasing program. Payments, online banking, factoring, general financial support to suppliers all fall under the umbrella of potential private-label initiatives. Sure, some such initiatives are available to corporate bank clients, but I see far greater opportunity for vastly more. Will banks be giving up something to gain something in the long run? Sure, but banks have lost a degree of leverage coming out of the credit crisis and it would behoove them to adopt a more agreeable posture in their wholesale banking businesses. Put another way, the tightrope has moved somewhat.