Centralize or decentralize? It may be the oldest debate in branch management, as banks swing between the two schools of thought.

For Atlanta-based SunTrust Banks Inc., the happy medium is a branch system that delivers “big bank capabilities with local decision and responsiveness,” according to C. Gene Kirby, executive vice president and retail line of business manager. Kirby spoke Monday at BAI’s SmartTactics conference in Las Vegas.

“If they feel the only way they can keep an account is to pay 25 basis points more in interest, they can do that as an account-level rate exception,” Kirby said. “But we track and monitor that very closely. Obviously, some markets could abuse that.”

“We try to achieve a corporate oversight and broad company view about deposit pricing, yet ultimately deliver at the client level the flexibility of decision,” he added.

Kirby said SunTrust had operated a “fully decentralized” organization until the late 1990s, when it operated with 28 separately chartered banks. The company essentially left the various bank CEOs alone as long as they met corporate financial goals, he said.

“Those regional CEOs had to hit the plan,” Kirby said. “It didn’t matter how they got there as long as they were able to grow their bottom-line profit 10% a year.”

After acquiring Virginia’s Crestar Bank in 1998, SunTrust executives realized they needed to move to a more centralized model in order to fend off increased competition and create a uniform delivery system across the retail franchise, Kirby said. Eight years later, the company retains regional bank presidents, but integrates them into a corporate line-of-business structure.

“This approach of delivering big bank capabilities with local decisions and responsiveness allows us to make investments from a corporate perspective,” Kirby said, citing delivery channels, new products, marketing support and Internet technology as examples.

SunTrust’s branch operating model, Kirby added, is designed to provide “a common approach to sales and service across the franchise." When somebody walks into a branch in Tampa, Fla., or Chattanooga, Tenn., they will see consistent, common processes.”

At the same time, he added, local bankers retain sufficient authority “to optimize client retention and spreads,” he said.

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