Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 3, 1993 TAG: 9311030049
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
Many banks also are enhancing convenience, such as extending hours, offering electronic banking and placing branches in supermarkets and other stores.
Banks increasingly are offering combinations of checking, savings and credit-card services aimed toward specific groups, such as upper-income customers and senior citizens.
"There has been a move in the last few years to redesign the branch network to be more of a sales environment," said Virginia Stafford, a spokeswoman for the American Bankers Association in Washington, D.C.
Deregulation in the banking industry in the 1980s initially sparked the increased competition, Stafford said, and low interest rates on deposit accounts are highlighting the trend.
"Banks didn't have to distinguish themselves in consumers' minds except location," Stafford said. "Now you've got a lot more flavors and . . . a lot more to choose from."
Because interest rates are low, customers increasingly are looking to take more risks and move their money out of standard bank accounts.
Bank deposits, which made up 38 percent of household financial investments in 1990, are projected to drop to 32 percent by 1995, according to a study by the McKinsey & Co. consulting firm.
"Banks are having to be more aggressive, because there's a lot more competition out there. Mutual funds are actively working to peel away the better-customer base" and insurance and other nonbank companies also are trying to lure customers with their financial services, Stafford said.
Banks now offer their own mutual funds and brokerage services in attempts to keep the relationship with their customers.
"We know that our customers know when their CD matures, they could probably take it down the street and give it to a broker who can give them a higher rate of return," said Cummings of Central Fidelity. "When it comes due, they don't have to go down the street. They can stay here."
Also, customers have less time to go to the bank, so banks must come up with products that fit their needs.
For example, Crestar Bank recently introduced a debit card and plans to expand its electronic bill-paying service, now offered in its Washington, D.C., market.
"The emphasis for us is to provide convenience to the customer, and we are looking at all sorts of innovations to do that," said Robin Brewster, a retail support manager for Crestar, a unit of Richmond-based Crestar Financial Corp.
A customer can apply for a mortgage loan and find out about investment services from Crestar Securities, in addition to the standard checking and savings packages, she said.
"We find out what are their goals and what is the level of risk they want in terms of an investment," Brewster said.
At Bank of America-Nevada, sales associates are out of the office "90 percent of the time to make cold calls and bring in new business," bank spokesman Paul Stowell said. "Basically, to offer the best product you have to offer an aggressive sales force and philosophy.
"If you can create a one-stop shopping distribution, then you've really overcome the biggest hurdle in any business - having the customer walk out and go elsewhere.
"Before, it was more brick and mortar, sit behind the desk and wait for the people to come in," Stowell said. "Now it's like taking it to the people, taking it to the supermarkets, malls, wherever people congregate."
by CNB