THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, March 18, 1996 TAG: 9603160244
SECTION: BUSINESS WEEKLY PAGE: 05 EDITION: FINAL
SOURCE: BUSINESS WEEKLY
LENGTH: Medium: 100 lines
When Steven E. Kocen returned to Hampton Roads after a 15-year absence, the banking landscape was dramatically different.
Citizens Trust Bank in Portsmouth, where he had been vice president of marketing, was gone, the result of a 1985 merger into a statewide bank.
Meanwhile, the increasing competition from non-bank players like mutual funds and mortgage bankers had forced the region's banks to take marketing more seriously.
Kocen left Citizens Trust in 1981 to become marketing director at First Security Corp. of Kentucky, a Lexington-based holding company that eventually expanded into Indiana and Ohio.
When First Security was acquired in 1992 by Banc One Corp., Kocen's job disappeared. He moved back to Richmond, where he took a job at Crestar Bank.
In January, Kocen joined CENIT Bancorp Inc. in Norfolk as first vice president, with marketing and sales responsibilities for its CENIT Bank and Princess Anne Bank subsidiaries. The 46-year-old Richmond native spoke recently with staff writer Tom Shean about the changes in bank marketing.
Why did you come back to Hampton Roads?
Mike Ives, CENIT Bancorp's president, approached me and we had a meeting in May 1995 about some of his plans. In December, I met with Mike and Morgan Davis, president of Princess Anne Bank. They gave me the opportunity to develop a sales and marketing approach for CENIT, and neither one put any restrictions on it.
What changes in the banking landscape in Hampton Roads are most noticeable?
What amazes me is that NationsBank is no longer the leader in bank deposits in Virginia Beach. Central Fidelity has taken the lead.
In addition, there are many more mortgage lenders in the area, including several like BancBoston Mortgage from the Northeast. Things are much more competitive here than they were in Kentucky, Ohio and Indiana.
How are smaller banking organizations like CENIT and Princess Anne Bank going to compete against giant banks operating in several states?
People don't buy bank products. They buy solutions to financial problems, so the key word for community banks is responsiveness. The pie for financial services is only so big. That means a community bank has be a lot more responsive to its customers and more creative.
What role does marketing have in that process?
When I got into the business, marketing was a form of public relations, and there was no differentiation of bank products. Marketing has gotten much more precise through the use of data bases and the identification of customer needs.
How have you applied computer data bases in marketing?
At First Security Corp., I was challenged by a chairman of the board to find a better way to market the bank's services. I got together with computer programmers and began taking as much information as we could from our mainframe computers. We ran it against other data bases and were able to provide names of potential loan customers to our branch managers. We used the data bases to drive more sales through the bank's branch offices.
How did you get into banking?
As a sophomore at the University of Richmond, I worked part-time answering telephones and giving credit-card approvals at United Virginia Bank, the predecessor of Crestar Bank. I got a bachelor of science degree in political science because, deep down, I was interested in the foreign service. But I enjoyed banking, and I took courses in finance, commercial banking and economics. After graduating, I started working for United Virginia full time on the credit-card side and later transferred into retail banking.
Are there any banks that you consider models for the ways they have marketed their services?
What amazes me is the way Wells Fargo & Co. has created a niche in electronic banking and personal-computer banking. Wells found small, entrepreneurial businesses where the principals were using personal computers for their personal financial needs. Wells developed a way to reach these small-business owners and managers through direct mail and to sell them lines of credit.
It's not the least expensive line of credit but it's convenient. But in banking, we've said for years that price is not the most important factor - that convenience and service are more important. Wells Fargo is a bank that has provided that through personal computers.
Do community banks like CENIT and Princess Anne have the resources to compete in technology-intensive areas with banks the size of Wells Fargo?
Small community banks aren't going to have the capital or people to invest heavily in home banking. They are going to use companies like Infinet and America Online as the gateways for their customers.
Is the market for home banking large enough yet justify significant attention from community banks?
Today the market is narrow, but what's it going to be like in three to five years? Do we want to wait around for it to develop? Or do we get in and position ourselves for what's coming? As a marketer, I have to be sensitive to needs in the market place.
How soon do you expect CENIT and Princess Anne to offer banking via personal computer?
I'm guessing 18 to 24 months. We've had a few customers ask, ``Can I do banking with you on a computer and modem?'' We've told them, ``No, you can't, but please hang with us.'' ILLUSTRATION: Steven Kocen
by CNB