The expanded services that ATM's can offer along with internet banking, mobile banking and the blur between banks, insurance companies, and investment firms have dramatically increased the capacity of the system to offer financial services to consumers and businesses. For a while, consumers unquenchable thirst for debt was keeping pace with the capacity created by these quantum leaps in financial services, but that is slowing down now to a more pragmatic environment -- evidenced by increasing credit morals and increased savings rates. Now the system has excess capacity and the response has been for the industry to shed cost via human capital and rationalization of capital expenditures. When there is excess capacity, organizations need to exit businesses. This is done in two manners, the easy way or the hard way. Actually there is no easy way, but the easier way is to think about tangential business models and ways to apply the organization's comparative advantages to access new markets. The harder way is to believe that the organization can innovate and service its way to laying a claim on a diminishing number of chairs when the music stops. Is it wild to think that a lending institution with a focus on consumer lending (with shrinking profitability and increasing costs) should not refocus its business model perhaps on assessing risk and financing new sustainable technologies? Unfortunately, most companies stay the course until forced to do something different - and that usually is not a happy ending.

What does the issue of overcapacity and potential industry exit mean for financial technology vendors? Overcapacity in the system should signal technology companies to look at their products and their own business models to see if they are aligned with industry survivors, but also, are they exposed to the strategic risk of overcapacity within the solutions they offer? Do their forward looking product development cycles include solutions that are aimed at a highly saturated market segment and therefore open to the risk of pricing compression? Every solution provider should be looking across their product and customer set and mapping which products are well-situated in a sector of financial services that is fully saturated from an end-user and customer of end-user standpoint. The worlds best technology companies have excellent foresight but also the fortitude to change direction ahead of the market realities of overcapacity. The issues raised here can have very deep implications for organizations. They are part of an organization's strategic risk assessment, but a part that is very difficult to manage because it is only partially within the organization's control.