Voices in Retail Banking
By Pat Allen
Life could be easier in retail banking. Competition is intense, products are increasingly commoditized and earnings are squeezed. But that's the conventional wisdom and it doesn't begin to capture the painstaking effort taking place in retail banks today. In the pages that follow as the first of Banking Strategies' two-part report on Voices in Retail Banking, you'll "hear" three status reports from Wachovia Corp. CEO G. Kennedy "Ken" Thompson, National City Corp. CEO David A. Daberko and Catherine S. Kenworthy, the product innovation leader at Bank of America Corp. It's hard to imagine more candid discussion on what's been accomplished — and the work that remains to be done.
Thompson and Daberko, for example, have reached a pinnacle where, at another time in a different environment, their predecessors might have hit the Coast button. To be sure, their careers have had no shortage of accomplishments, and both, in fact, will be general session speakers at BAI's Retail Delivery Conference & Expo in November. But far from being complacent, each in separate interviews leaves no doubt that his work continues — and with an unmistakable urgency.
Four years into a self-described epiphany about the weakness of National City's retail operation, Daberko is a dyed-in-the-wool corporate banker who became convinced that the retail operation was the worthiest beneficiary of National City's rich profits from its mortgage business. Massive investments were made, dramatic improvements introduced and results thus far are somewhat encouraging. But to date, he said in June, "This retail bank is not as good as it needs to be."
There's been no standing still at Wachovia either, as the last four years have brought fundamental changes inside (leading to better-than-peers service quality) and out (including the original merger of Wachovia and First Union Corp. and a joint venture with Prudential Financial Corp.'s retail brokerage operation). The bank's progress notwithstanding, Thompson pushes on, acknowledging Wall Street's eyes on the pending $14 billion purchase of SouthTrust Corp. It's not a comfortable time: "We ought to be applauded for doing two things at once, not criticized for it," says Thompson.
Meanwhile, one can imagine the breathlessness when Bank of America's Catherine Kenworthy talks about "higher volume and faster velocity of new products." A quasi-manufacturing approach to the processing of creative ideas is at the heart of the bank's expectation to accelerate revenue growth through innovation. It's a disciplined, group effort. "Revenue growth," says Kenworthy, "can't be based on one person having a great idea one day." BofA has already launched several new products as a result of this innovation process.
From Thompson to Daberko to Kenworthy, these conversations with senior editor Kenneth Cline document the kind of "restless discontent" that make for fascinating reading — and often excellent operating results.
Coming in Banking Strategies' Retail Banking Special Report: Part II: Strategies For the Front Lines, including the results of BAI research focused on improving front-line sales and service.
Ms. Allen is managing editor of Banking Strategies.