BS&T: Compare the industry today to when you began your banking career.
Johnson: Competitive pressures have never been as intense as they are today. There are fewer players, but those players are stronger and pay more attention to client needs. And they are using technology to drive value.
In addition, the regulatory environment is the toughest it's been since I began my career 30 years ago, and I don't expect it to get any better. In fact, there will probably be additional regulations that will bleed off [additional] resources.
BS&T: What changes have you seen at BB&T?
Johnson: When I arrived at BB&T in 1999, we were a $43 billion organization. Today we have nearly $137 billion in assets. We've experienced explosive growth and have added a full range of complex financial services products. About three to four years ago we made a decision to slow down — but not stop — our M&A pace. Our strategy now is to generate value from the franchise we've created and to focus on organic growth. Shifting from being an M&A machine to focusing on driving organic growth requires a good deal of change in the organization, including people, process and infrastructure.
BS&T: Will you still look at acquisitions?
Johnson: We'll still do M&As where it makes sense, especially on the insurance side; one of our strategies is to grow our insurance business. But we are mostly focused on organic growth through channel integration, sales opportunities, and new products and services.
Johnson: We are here to provide value to clients. Generating value can mean making a process simpler for the client, reducing cycle time or increasing transaction speeds. Both SupplyChain 360 and Lockbox Web Exceptions streamline operations for our clients and provide them with better risk management and capital utilization. From a bank perspective, these solutions enable us to learn more about our clients.
BS&T: How is the technology function keeping pace with the strategic changes at BB&T?
Johnson: Client expectations for self-service have driven a lot of changes within IT. Since technology is directly touching the client, we've had to make changes in our technology infrastructure. We're also very excited about a multiyear transformation program we have just embarked upon that will change how we view IT at BB&T. Going forward, we want IT to be a value center rather than a cost center. In the past we've emphasized driving down IT costs, whereas now we want to use IT as a key operating leverage point to generate better economic value.
BS&T: Can you describe the transformation program?
Johnson: There are several broad components to the program. The first is creating the infrastructures needed to provide high availability and fast response to customers using our products and services directly. The second is risk management. The shift to electronic channels means there are a lot more opportunities for fraudulent activities. We're looking to strengthen and expand our overall risk management capabilities.
The third component is generating value through consolidation, integration, standardization and business optimization. We want to find ways to help BB&T run better, reduce costs and cycle time, and generate revenue through technology. We plan to devote a third of our resources to creating value.