Flickers of growth focus in a landscape of darkness for Bank of America, with news release that they are hiring 180 Merrill Edge Financial Solutions Advisors (FSAs) throughout New Jersey in 2010, presaging doubling of FSA’s by next year to more than 1000 nationwide. Like many banks, focus is on mass affluent, and BofA claims to serve more than 8 million of these. Big investments in data mining to dig the gold in that big mountain range. New product and service investments too, with Platinum Privileges, which rewards customers with $50k+ in deposits with xxx, new mobile app, and even specialty stores for aristocratic Main Street presence integrating investment, small biz and mortgage specialist.
An article in Dow Jones Newswires yesterday reported that Citi has reorganized its U.S. retail banking and credit card operations, in order to improve sales and service. The reorganization is based around customer segments, product development, and distribution. In announcing the reorganization, Citi acknowledged that its previous structure was too product-centric.
In recent years, banks have emphasized their renewed focus on relationship banking. These banks are now starting to understand that, to achieve their vision of relationship optimization, strategy and structure need to be in synch. Benefits of having customer-based organizational structure:
- The company has a much greater ability to anticipate, and react to, changes in the marketplace
- Customer ownership rules are more clearly delineated
- Product development starts from the perspective of the customer rather than the product
- Employee compensation is based on the attainment of customer-focused metrics (acquisition, retention, lifetime value), rather than reaching sales goals for products that may adversely affect long-term relationships
- Sales teams become more specialized around different segments, develop a more holistic understanding of customer needs, and can present more comprehensive solutions. Training and sales support are also recast to focus on segments rather than products