Title: Capital Markets Systems Pay off; Sales of Mutual Funds, Annuities, and Other Nontraditional Bank Offerings Are Up, Partly Due to New Systems and More Focused Marketing
Abstract: Thanks to plunging interest rates, such traditional bank products as savings accounts and certificates of deposit are providing dismal returns for consumers, which is good news for bank broker/dealer subsidiaries. Annuities and mutual fund offerings are selling like hot-cakes, and it seems equity market isn't so bad after all. Still, brokerage operations, discount or full service, are a low-margin business, and processing costs associated with many nontraditional bank products are considerable. Furthermore, as banks become primary providers of insurance- and securities-based products in their markets, they must process more transactions just as efficiently as before or risk losing business to a competitor. Harnessing information. Current automation spending patterns of banks with capital markets operations reflect efforts to wring more efficiency-and Profitability-from both sales force on front end and clearance and settlement operations in back office. key, say bankers, is to integrate information on bank product offerings so that sales people are more knowledgeable about a customer's relationships with bank. That way they can access information quickly and easily when, say, a customer calls with a product inquiry. that capability, in turn, should be reflected in back-office, where customer statements can be produced that combine all elements of a portfolio-when it is legally permissible to do so. In meantime, many banks are concentrating on growing nontraditional lines of business, which doesn't happen overnight. We started a bond department long ago and only brought other [investment] businesses up in past five or six says Michael Smith, president of Dominion Investment Banking, a subsidiary of Dominion Bankshares Corp., Roanoke, Va. The ability to integrate those businesses from a customer standpoint has been a battle. Smith says that because volume of investment business has increased fourfold in past two years, his organization has been able to negotiate lower fees from a third-party processor for clearing and settling transactions. Dominion's focus, therefore, is now on improving level of resources available to sales force, such as access to real-time pricing information and analytical systems to help customers determine certain financial instruments are appropriate investments. Adding value. Data is king right now, says Lawrence Harb, president of LaSalle Consultants, Ltd., Chicago, whether you have most up-to-date information on a stock or bond or you can access a client portfolio as soon as client cars. more information you have, better off you are. Simply put, sales staff must have more information than client in order to add value and make sale, says Harb, whose clients include banks with broker/dealer operations. Institutional clients, for example, have access to a variety of information sources with which to monitor value of existing investments and decide on new ones. Speaking as a former broker/dealer salesman, says Harb, the only time we could offer added value to an insurance company customer was when we did our own deals that client couldn't get information on anywhere else. Liberty National Bank & Trust Co., Oklahoma City, with $1.5 billion in assets, invested in broker/dealer technology in late 1980s that is now paying off in greater sales and trading productivity. Liberty National and its sister institution, First National Bank of Tulsa, which has $1 billion in assets, installed workstation-based Intrader system from Digital Solutions, Inc., Bloomington, Minn. Both banks are subsidiaries of Banks of A&d-America, Inc., Oklahoma City. Our focus is giving salesperson or trader access to all information needed to get a piece of business done, says Bernard Hall, senior vice-president and manager of Liberty National's investment banking division. …
Publication Year: 1992
Publication Date: 1992-03-01
Language: en
Type: article
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