BAI Online | Banking Strategies | May/June 2006

Differentiation: Today?s Mandate

Differentiation may be the hottest buzzword in financial services, reflecting a new understanding among bankers that the surest path to success is to set their own company and brand apart from the rest. A differentiated company can grow by attracting customers with a unique value proposition, avoiding the pressure to compete on price.

The May/June 2006 issue of BAI Banking Strategies addresses this theme in an article about investor relations, where analysts urge banks to pursue original strategies instead of following the pack. Competitive strategy guru and Harvard business professor Michael Porter underscored the same point in his keynote address at last year’s BAI Retail Delivery Conference & Expo. Porter predicted the retail banking industry will soon enter an era of strategic positioning in which companies will be forced to become distinctive in order to be successful.

How can banks respond to the challenge of accelerating commoditization pressures? We’re focusing on that as we plan this year’s BAI Retail Delivery Conference & Expo, to be held November 14-16 in Las Vegas. A range of sessions will be devoted to help bankers prosper and craft differentiated strategies in the pursuit of three imperatives: strategic clarity, management innovation and unique customer experiences. The BAI team will be introducing many new approaches that will be integrated into the plans for what is sure to be an impactful event.

Strategic Clarity: Breaking out of the cycle of me-too competition requires delivering something distinctive to customers and making tough choices across the value chain in order to deploy resources that enable a bank to be different. Strategic clarity can, in part, be defined as the willingness to make those choices and tradeoffs. As Michael Porter has often said, strategy is the willingness to say no to some opportunities in order to focus on core strengths. Conference sessions will provide attendees with a framework for making those choices.

Management Innovation: While strong products or superior technology are helpful in attaining superior profitability and competitive differentiation, they are not sufficient. In nearly all cases, firms that achieve sustained high performance have discovered entirely new ways to organize, lead, coordinate and motivate. Conference speakers will explore some of those management innovations.

Unique Experiences: Recent BAI Research, such as the Front Line Experience in 2005 and The Front Line Factor in 2004, has highlighted how retail banking is undergoing a fundamental shift in which experiences are becoming a distinct economic offering. Experiences result when a company uses a tangible product and service as the stage for engaging customers in an inherently personal way. These experiences are as much about appealing to customers’ sensations as they are about fulfilling a tangible product or service need, and they must be delivered in a multi-channel environment. At this year’s BAI Retail Delivery Conference & Expo, BAI will present additional ground-breaking research on how banks can deliver these customer experiences to achieve the differentiation they seek.

BAI is committed to delivering relevant information to help you address your critical business challenges in publishing, research and conferences.

Looking for an integrated training solution?

Give your employees access to premier training content via the Internet, CD-ROM, VHS video or print. Through its recent acquisition of Bankers Training Consulting Company, BAI now offers more than 400 programs covering a wide variety of topics including compliance, teller/frontline, lending, security & fraud, management, computer skills and more. Visit www.bai.org/training/info.

BAI’s 2006 Budget Planner is designed to help you easily build and plan your conference and seminar attendance (see www.bai.org/planner/bs).

Researching solution providers?

You’ll find close to 600 companies in 55 categories in the BAI Resource Directory. Go to www.bai.org/resource and find solutions for ATMs, Check Imaging, Core Systems, Marketing, Regulatory Reporting, Smart Cards, Training, Transaction Processing, Wholesale, Corporate & Government Banking and more.