ABA Banking Journal 5/08 - (Page 4) Editor’s Column WILLIAM W. STREETER Editor-in-Chief Banking JOURNAL ABA USPS-544-030 MAY 2008, VOL. C, NO. 5 Editorial and Executive Offices: 345 Hudson Street, New York, N.Y. 10014-7115 Phone: (212) 620-7210 Fax: (212) 633-1165 E-mail: ababj@sbpub.com Internet: http://www.ababj.com Published monthly for the American Bankers Association by Simmons-Boardman Publishing Corp. and copyrighted 2008 by ABA; Edward L. Yingling, President, 1120 Connecticut Ave., N.W.,Washington, D.C. 20036, (202) 663-5000. Title registered in U.S. Patent Office. With the exception of official Association announcements, the American Bankers Association disclaims responsibility for opinions expressed and statements made in articles or advertisements published in ABA Banking Journal. They’ve got connections “ANY TIME A BUSINESS BEGINS TO resemble a commodity, Frost Bank begins to get itchy.” So wrote Executive Editor Steve Cocheo in his cover story of Texas-based Cullen/Frost Bankers (p. 26). Over the years there has been a great deal of hand-wringing and warnings about the “commoditization of banking.” With good reason. But here is a bank that has made it a strategy, almost, to exit business lines that have become commodities—mortgage originations, credit cards, and indirect auto lending being three recent examples. CEO Dick Evans doesn’t claim any special foresight for having largely dodged the current mortgage woes, the story will tell you. What he says is that relationships are what is most important, not transactions. And the mortgage origination business, as well as others he exited, had lost its ability to build relationships. “Relationship banking” as a phrase, is right up there among the pantheon of banking bromides. But a bromide, by definition, was once a fresh, if obvious, truth, made trite by overuse. “Obvious truth” is the equivalent of “common sense”—they are neither obvious nor common to people busy looking for something more current, exotic or unique. Take it away from a formal definition, and “relationship banking” really describes what it means to be in a service business, and isn’t that what most banks are? If a bank employee can establish a meaningful connection with a customer by solving a problem or giving aboveaverage service, then you have the potential for an association grounded on something more lasting than a single transaction or the lowest/highest rate. The stronger the connection, the more likely it will be to withstand the rigors of competing claims, or—apropos of current conditions—economic stress. Customer relationships are easier to establish with face-to-face contact when a business is smaller. At $13 billion in assets, Frost Bank is certainly not small, yet it has managed to keep focused on relationships, not transactions. But it is possible even for much larger organizations to make that connection with a customer. Not all such connections need be in person. An innovative service—like an automated fraudulent activity alert—can do it, though there is probably no better way than having an employee take the time to explain something or make something work when the standard response doesn’t fit the customer’s situation. A little booklet called “The Frost Philosophy” given to all employees spells out the bank’s philosophy, mission, and values. Interestingly and appropriately the booklet is as much focused on employee relationships as it is on customer, shareholder, and community relationships. If employees are suspicious of each other, fail to cooperate, or take no interest in each other, it will be futile to expect them to connect with customers in a way that builds lasting relationships. (We recommend you read the booklet. You can find a link to a pdf version of it in the cover story in our digital edition. Go to www.ababj.com, and click on either “digital magazine” or “current issue.”) Not to put the bank on too high a pedestal, for it is not above its share of gaffes, and there certainly are other banks that follow a similar path, but in the current post-credit-binge malaise, it is refreshing and encouraging to read of how adherence to a set of “obvious truths” has paid off. bstreeter@sbpub.com Editor-in-Chief Executive Editor Senior Editor Editorial Assistant Art Director Associate Art Director Art Production Manager Contributing Editors Leslie T. Callaway Lucy Griffin Mark Kruhm Orla O’Sullivan Advisory Committee Jeffrey S. Owen Production Director Circulation Director Publisher William W. Streeter bstreeter@sbpub.com Steve Cocheo scocheo@sbpub.com Lauren Bielski lbielski@sbpub.com Andrea Rovira arovira@sbpub.com Wendy Williams wwilliams@sbpub.com Phil Desiere pdesiere@sbpub.com Todd M. Blanchard tblanchard@sbpub.com Ed Blount Nancy Derr-Castiglione Kenneth Kehrer Bill Orr Lisa Valentine Edward L. Yingling Virginia Dean Mary Conyers-Brown mbrown@sbpub.com Maureen Cooney mcooney@sbpub.com Gus Blumberg gblumberg@sbpub.com Subscriptions: Call 1-800-895-4389; or write to: Subscription Dept., ABA Banking Journal, P.O. 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Research: full text of ABA Banking Journal is available on Nexis, a proprietary electronic database http://www.nexis.com. ABA Banking Journal (ISSN 01945947, USPS 544-030) is published monthly by Simmons-Boardman Publishing Corp., 345 Hudson St., NY, N.Y. 10014-4502. Periodical Class postage paid at New York, N.Y. and additional mailing offices. Canada Post Cust. #7204564; Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2; Agreement #41094515. POSTMASTER: Send address changes to ABA Banking Journal, P.O. Box 10, Omaha, NE 68101-0010. 4 MAY 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com http://www.ababj.com https://www.frostbank.com https://www.frostbank.com http://www.ababj.com http://www.nexis.com http://www.ababj.com
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