Business models are an ever evolving component of the corporate world. Those who remain stagnant, and fixed to singular model without the flexibility to change, adapt and move forward are invariably doomed to failure.
Many a successful business model has gone the way of the wax record or the 8-track tape. Companies rise and fall on their ability to adapt to changing business environments, regulation and other factors that impact their business model.
These are changing times for the world of finance, and particularly that of securitization.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is seen by many in the financial community as a severe threat to their business, but in fact, many aspects of it are simply reflective of the need for a dynamic shift in the business models used in various financial sub-sectors.
In the years before Dodd-Frank models shifted heavily to an environment with minimal regulation and maximum ability to generate revenues based on financial models that did not concern themselves with concomitant consequences. Companies took considerably more opportunity to earn revenues and fees, unaware that the results could be economic collapse.
At Harrison Prescott, with the sound advise and consultation from our fellow divisions of The Epicurus Group, we have developed new business models for our services that avoid conflicts of interest, provide assurance of quality to borrowers, and demonstrate to investors that our services are impartial, fair, correct and totally independent, while falling within full compliance with Dodd-Frank.
Historically, the pendulum of regulatory control tends to take wide swaths, and while it went in the early 21st Century to one extreme of minimal regulation, it is now in a path toward greater regulation. Eventually, it will come to rest in a happy middle ground that should last a considerably long period. The last peaceful period had a duration of about 70 years. Given that, it may be best for companies to simply adjust, as we have, and adapt to a new environment with modifications to business models.