Category Archives: Commercial Banking

BMO completed the acquisition of M&I Bank, commits $5 billion in small business lending

The Minneapolis / St. Paul Business Journal reported that BMO (whose U.S. bank arm, Harris Bank was the 34th largest U.S. bank by deposits at the end of 2010) had completed its acquisition of M&I Bank (32nd largest), and immediately made a commitment to lend $5 billion to businesses.

This acquisition comes as large bank M&A deals and rumors have been on the increase:

  • PNC Bank (5th largest U.S. bank by deposits) announced the acquisition of RBC Bank (44th largest)
  • Capital One (10th largest) announced the acquisition of ING Direct (17th largest)
  • HSBC (11th largest) has put its upstate New York branch network up for sales
  • BB&T (12th largest) has made no secret of the fact that it is looking bank acquisitions
  • BNP Paribas is considering selling off Bank of the West (24th largest)

There is the expectation that this bank M&A activity will  continue, as some banks have emerged from the financial crisis much stronger than others.  More insights into banks’ relative performance will be seen in the coming weeks, as they publish quarterly financials.  In addition, some banks will use the 2Q financials conference call to clarify their position regarding acquisitions or sales.   In addition, there is the sense that, given the 8,000 banks in the U.S., significant consolidation is necessary in order to create a more efficient industry.

From a marketing perspective, these acquisitions create great opportunities for the combined bank, in leveraging the relative strengths of both banks.  They also, of course, create some significant challenges, in such areas as:

  • Branding (including decision on whether to retain one or more brands, or to create an entirely new brand, logo, tagline and positioning for the newly-combined company.  In addition, any decisions of rebranding have significant cost implications for branch signage, collateral, etc.)
  • Products and pricing
  • PR (in particular as these acquisitions typically result in branch closures and headcount reductions)
  • Customer retention (as customers are susceptible to competitive approaches during the transition process)
  • Sales and service channel and systems integration

Market Research Pitfalls, Part 1: The Art of Asking Questions

In working with clients, we often encounter marketing organizations that have been snakebitten by ineffectual research to the point that they no longer see the value in conducting it at all. Why is it so hard to produce valuable research?

One reason is that many don’t understand that the most natural and effective starting point for research is with a strategic problem. They think of research as a box to check rather than as a tool that can help them optimize their performance. Or, they think of research only as a tool for certain situations—focus groups for brand work, surveys for customer satisfaction measurement etc.

To be sure, there is an art to identifying and articulating strategic problems in a way that enable research support. It is the step that lies between identifying an issue—a product or sales region not making their numbers, a marketing program not generating the projected number of leads—and a proposed solution where this art can most effectively be practiced. In reality, however, most organizations simply want to make changes and move on. They don’t bother to ask the questions which are critical to producing effective, strategically vital research. The answers to questions like the following, delivered through well-designed research, play a central role in strategic and tactical decision-making:

  • Do customers in the underperforming sales region have different attitudes than those in other regions?
  • Did customers not know about the new product or were they simply not interested?
  • Are prospects responding more strongly to competitors’ lead generation efforts and if so, why?

Conducting research is not a panacea—it won’t give you all the answers and it’s not worth the investment in all situations—but it can and should help more than it does. Organizations just need to stop and ask the right questions.

More banks launch initiatives for National Small Business Week

Earlier this month, we posted a blog on small business initiatives from Citi, TD Bank and Wells Fargo, which were introduced in advance of National Small Business Week. As National Small Business Week is taking place this week, other leading banks have also introduced new small business initiatives.

  • Chase introduced a number of initiatives, including incentives of up to $1,000 for new small business checking customers, as well as Instant Storefront from Chase, a solution that enables small businesses sell products online.
  • Bank of America launched a suite of small business charge cards (see our blog on this launch).  In addition, the bank has partnered with SCORE to develop a five-part series of three-hour workshops for small businesses, entitled “Simple Steps for Starting Your Business.”
  • Capital One partnered with Better Business Bureau to introduce Managing Credit – Made Simpler, a set of resources to help small businesses to manage credit.
  • American Express OPEN introduced AdManager, a tool to help small businesses manage online advertising campaigns

It is notable that the number of small business campaigns is much larger this year than it was for National Small Business Week in 2010, reflecting the improved economy over the past year, as well as banks’ renewed interest in the small business market.