At a recent Goldman Sachs event, Chad Gifford, CEO of FleetBoston Financial, spoke about the strategic positioning of the bank and the business technology used to support its retail bank, including customer insight programs, online banking and online brokerage services.
Fleet's Personal Financial Services businesses operate on a single system, said Gifford. "A single system not only gives you the operating efficiency, but as you understand your customers more, it allows you the cross-sell ability."
For many financial institutions, this is a new world. "I don't think banks have done a very good job in the past of understanding who their customers are," said Gifford. "For the first time in the thirty-plus years that I've been in the bank on the consumer side, we're making efforts to understand our customer and upgrade service quality."
The idea is "to make service quality, solving problems, and not making mistakes a significant core competency and competitive advantage," said Gifford. "We think we're making very significant progress."
By bolstering those core competencies, Fleet hopes to be in a good position to compete for valuable online banking customers. "In my view, online consumer banking is the most dramatic banking product that I've ever seen," said Gifford. "The ones who bank online are stickier, they have two to three times the balances of those that don't use it, and the attrition is lessened one-third."
Using customer insight solutions should yield dividends from that population. "As you get to understand these customers better, and they're actively looking at the screen, and we adapt our products to what they want, we're going to have revenue opportunities that we haven't seen in the past," said Gifford. "To say that I'm interested in this and follow it carefully is an understatement."
Fleet also hopes to position itself for a resurgence in stock market interest by the public. "I want our company to be positioned so that when people want to go back into the markets, they don't have to go outside the bank to do so," said Gifford. Fleet currently has 183,000 customers who access Fleet's Quick & Reilly brokerage service through its online banking platform, up from 165,000 in 2001.