Consumer Finance International Retail Banking Wealth Management LoBue Technology				Retail Financial Services... CUSTOMER-CENTERED FOCUS IS KEY TO SUCCESSFUL MERGER INTEGRATION Recent announcements of mergers and acquisitions in the financial services industry such as the Citicorp/Travelers Group will create entities with size and scope previously unseen in the industry. Many observers cite a major reason for the formation of the financial services behemoth as being the seemingly endless cross-selling opportunities that will be created when the combination is achieved. The huge availability of financial products should result in customers who are content with a large, full-service provider of their financial needs. However, simply offering services to customers of one company to those of another will not effectively achieve customer satisfaction and solidify bank-customer relationships. There are still issues that banks will need to address in order to remain competitive in the growing financial services market. The ever-increasing use of multiple retail banking delivery channels is helping banks to provide their customers with fast, easy ways to manage their finances. Customers are now banking more than ever on their home PCs and at ATMs that provide them with convenient hours and access. However, this increased use of multiple, easily accessed banking capabilities has not necessarily steered customers away from more traditional means like branches and call centers. Instead, the availability of new retail banking channels has created a more versatile, multi-channel using consumer with higher expectations of its financial services provider. So, what does this new type of consumer mean to bankers who are trying endlessly to establish and manage healthy, happy customer relationships? It means that bankers must continue to develop new technology not only to make their multiple services user-friendlier and more efficient, but to allow themselves to take full advantage of the multitude of customers who have adopted these technologies as part of the every day management of their finances. The diversity and quantity of retail banking channels is allowing banks to mine customer data in a more effective manner that can create new selling opportunities, but unless banks utilize this customer data for the creation of opportunities based upon the comprehension of customer behavior, the investment in new channels just adds to the cost of delivery. Many banks are losing business to non-traditional competitors because they are not properly marketing products and services to their qualified customers. Customer service representatives, tellers and call-center operators could market bank products if they were armed with the proper customer information. However, most banks are not sufficiently tracking customer transactions and financial behavior. If they were, they would be able to target specific segments of their existing customer base for specific products. This method also helps develop the bank-customer relationship by giving the customer the feeling that their bank has a true understanding of what retail services they need. For example, if a bank knows that a customer has made several recent credit card purchases at the Home Depot, a financial service officer can proactively call that customer to determine if a home improvement loan is needed. Certainly this creates a selling opportunity for the bank, but customers ultimately want opportunities for themselves. Many banks have tended to be "bank centric" rather than "customer centric," and thereby have not provided the opportunities to their customers. The result - customers look elsewhere for their financial service solutions. According to the ABA's 1997 Retail Banking Survey Report, over 70% of customers establish relationships with banks today by opening a checking account. Checking accounts are typically viewed as standard transaction accounts, and customers tend to be treated in a similar fashion ­ as transactions. However, if banks capitalize upon their existing points of contact (branches, call centers) to develop an understanding of the lifestyle and financial service requirements of their customers, the current selling paradigm can be shifted to present the customer with financial service opportunities ­ investments, debt consolidation, trust accounts, college savings, etc. It is only when a bank shifts from the transaction provider of today ­ checking accounts ­ to a financial service provider of tomorrow, that the infrastructure will be leveraged with new customer opportunities brought about via mega-mergers." return
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