Byline: David Hendricks
Jun. 7--FINANCIAL INDUSTRY CONTROLS ITS OWN DESTINY: San Antonio's financial industry has been measured. It has been studied. The focus groups have been held. The $85,000 consultant report has been delivered.
But Finance San Antonio, as a movement to promote and advance the regional industry, is up in the air.
Doubt is cropping up whether the industry can or should organize a supportive organization along the lines of the city Convention & Visitors Bureau for the hospitality industry or BioMed SA for the health care industry.
After Washington Mutual last year announced it would bring thousands of jobs to San Antonio, a study of the city's financial community produced the unexpected finding that, by some measures, the financial industry was the largest one in San Antonio.
The percentage of San Antonio workers in the financial industry ranks second-highest in the nation after New York City. That's thanks to huge companies and operations including USAA, Citicorp, JP Morgan Chase, World Savings, Washington Mutual, Cullen/Frost Bankers and a plethora of credit unions.
That sparked the idea that the regional industry should band into an organization to advance its capabilities and accelerate the momentum of investment already pouring into the city.
The City Council last year appointed 24 people to a Finance San Antonio ad hoc committee and allocated the money for a consultant study covering the banking, investment, insurance and accounting communities.
Assisted by the city's Economic Development Department, Finance San Antonio staged 14 focus-group sessions in March and April, led by ICF Consulting, to determine what opportunities or strategies the financial industry can pursue.
The finding that the region needs venture capital to finance new technology and non-technology companies alike was not surprising. But the banking industry itself lacks lending specialization to assist the growth of San Antonio's newer industries: companies in the transportation, health care, technology and creative fields.
In effect, the banking community is still stuck in the horse-and-buggy era of ranching and oil-and-gas lending, where loans are collateralized by property and equipment, not the cash-flow lending that newer industries seek.
San Antonio possesses plenty of wealth for initial company investment. Too many of the rich families want to stick with oil-and-gas and ranching activities, though, because the profits arrive more quickly and surely than in the riskier and long-developing technology and health care fields.
Can San Antonio turn this situation around? Along the way, can the city also boost its image toward recognition as a Southwest financial leader, joining Phoenix and Dallas, and an international financial center with ties to Latin America, like Miami?
Recommendations fill the hefty report delivered to the City Council last week. Councilman Art Hall will lead an effort to add $110,000 in city funding, much as the city and Bexar County contributed last year to help start BioMed SA.
The ball now is in the hands of the industry, however. Finance San Antonio has held discussions with the Greater San Antonio Chamber of Commerce to act as a catalyst as it did last year for BioMed SA. Chamber President Joe Krier, however, is not yet convinced the industry wants to help fund a new institution.
"We'll pull together some financial institutions to see about a follow-up," Krier said. "We'll say to them, 'How would you like us to proceed?' Some may say there is no need for an organization. We can do this in other ways.
"The larger question is: Is this realistic that San Antonio can strive to be a global financial center? I don't know if that is feasible. We'll need to know more." If New York City started from scratch today, it probably could not become a global financial center itself because of the way the Internet decentralizes financial services, he added.
Another question is how many industries deserve supporting, collaborative organizations. "Where do we put our assets?" he asked. "We need to be thoughtful about priorities." Councilman Hall won't stop, though, if the Greater San Antonio chamber declines to take a leading role. Another existing organization can be found for a catalyst, said Ramiro Cavazos, city economic development director.
The bottom line comes to this: The financial industry itself must display the leadership and vision to make the investment so far pay off. It has to decide whether the effort is justified or whether the new report just gathers dust.
dhendricks@express-news.net
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