Editor's Note: A quarter of a century ago, American Banker asked dozens of bank CEOs to predict what the banking industry would look like today. Below is the story we published in our 150th-anniversary issue in 1986.
Edward B. Brandon
President, CEO
National City Bank, Cleveland
DREAMS FOR BANKING:
My hope for the next 25 years is to be able to compete on an equally regulated basis in all aspects of financial services
BIGGEST CHANGE TO AFFECT BANKING:
Probably the biggest change to affect banking will be the trend toward socialization of the industry, which will result in a risk-free division and an investment division, and ultimately will fundamentally alter the structure of banking as it is now.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive's needs will change very little over the next 25 years. Banking has become much more of a business, and success depends upon the use of fundamentally good business judgment. That will hold true regardless of what changes occur in the banking business.
The CEO must become conversant with the dynamics of all aspects of financial services so that he can decide which aspects the organization will be active in and to what degree.
WHAT'S AHEAD FOR THE YEAR 2011:
By the year 2011, the financial services firm will look like a financial services holding company with different elements isolated within the company. These separate entities will stand alone but will be linked by common overall management and an electronic distribution system.
—•—
Leonard W. Huck
President, Chief Administrative Officer
Valley National Bank of Arizona, Phoenix
DREAMS FOR BANKING:
If commercial enterprises are to be allowed in the financial services industry—that is, AZP making a deal to purchase MeraBank, the Ford Motor Co. purchasing Nationwide, Sears, Roebuck and Co. buying a savings bank, and so forth—the commercial banks should be free to take equity positions in various businesses to provide diversification.
I'd like to see us in some real estate developments, some services denied by Glass-Steagall, insurance offerings, and the full-service brokerage business.
BIGGEST CHANGE TO AFFECT BANKING:
The possibility of a collapse in the Social Security system would have a profound effect on America. As longevity increases, more and more people will be drawing benefits for longer and longer periods, yet the pool of younger workers will diminish in relation to the size of the group of pensioners that they are supporting.
There is still time to change the method of funding, perhaps by turning to private enterprise, or by creating a government agency charged with investing each worker's contributions for a favorable yield.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Most new things are simply refinements and extensions of traditional skills that earned the CEO his or her position in the first place.
Obesity, financial, managerial, human relations, and marketing skills are vital, but even the president of a small local bank will find a knowledge of international affairs and worldwide trends necessary in the future.
WHAT'S AHEAD FOR THE YEAR 2011:
Indications today point to a highly automated industry, with customers served electronically in their homes, vehicles, and work places. While the branch system still will be important to retail operations, individual offices most likely will handle only nonroutine transactions or special situations.
Almost all banks will be part of a large nationwide network or organization, but local outlets will be necessary for efficient service to local markets. Perhaps teller stations will be replaced with computer terminals, engineered to respond directly to customer queries and instructions.
—•—
George F. Moody
President, CEO
Security Pacific National Bank, Los Angeles
DREAMS FOR BANKING:
Looking ahead to the 21st century, we would expect that the distinction between commercial banks, savings and loan associations, and investment banks will be blurred considerably.
Each of these types of companies will be permitted to operate freely, providing a broad array of financial services to customers, including both investment and credit products.
BIGGEST CHANGE TO AFFECT BANKING:
Events in the developing world are likely to greatly impact both financial markets and society in general over the next 25 years. Among others, these would include the resolution (or lack thereof) of lesser developed countries' debt programs as well as the return, in varying degrees, to free market economies by several Communist nations—the most notable of which is the People's Republic of China.
WHAT THE CHIEF EXECUTIVE WILL NEED:
A broad understanding of the transformations underway in financial markets today, the implications of these changes, and the opportunities they present is essential to successful future management.
In addition, the ability to use ever-improving technology to move information more quickly and provide the consumer with a better product is key.
WHAT'S AHEAD FOR THE YEAR 2011:
While community banks will likely continue to play some role in the future of financial services, the key players in 2011 will be global organizations providing a vast array of services to a variety of retail and institutional customers.
—•—
J. Terrence Murray
Chairman, CEO
Fleet National Bank, Providence, R.I.
DREAMS FOR BANKING:
A financial services firm in 2011 will be capable of satisfying all the financial and related needs of the consumer. This will require the consolidation of products and services now offered by a number of different providers, including banks, insurance companies, brokerage houses, and others.
The most significant changes probably will occur in the way customers access these products and services. The full-service branch as we know it today will be practically nonexistent. Customers will access their money and receive financial advice via the telephone, automated teller machines, and home banking computers. Convenience and accessibility will become principal criteria for a financial services company.
BIGGEST CHANGE TO AFFECT BANKING:
The most significant changes will result from the playing out of deregulation of the industry, which will result in a blending of financial services providers. It will create a very different industry structure in all areas and will change the nature and business practices of all types of firms—banks, insurance companies, brokerage houses, and so on.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Technology and information processing will be the driving forces and the determining factors that will bring to fruition the changes that are taking place in American industries. CEOs will have to be on top of this.
Mergers and acquisitions bring together a variety of companies—most with different cultures and philosophies. CEOs will have to have the ability and flexibility to manage these diverse companies, allowing autonomy and preserving identity while maintaining control and assuring the compatible mix of companies.
It is becoming more and more painfully clear that adult illiteracy is a problem in this country. Corporations and educational institutions will have to form partnerships that will enable them to have a significant impact on this problem. CEOs will have to establish a literacy priority in their organizations and their communities.
WHAT'S AHEAD FOR THE YEAR 2011:
By the year 2011, and hopefully long before, we would like to be offering a compete array of financial services through unrestricted distribution systems.
Clearly, this would be predicated on significant regulatory changes repealing current prohibitions of bank securities and insurance activities. For our company to compete effectively, we must necessarily meet nonbank bank competition on the "level playing field" for which our industry has clamored (with as yet limited success) during the past decade.
More specifically, in addition to the products and services we offer today, we would hope to underwrite securities, distribute our own mutual funds, provide investment advice, underwrite and sell a full range of insurance products, participate in real estate development and real estate brokerage, provide broader based data processing services, and offer travel agency services.
We would like to have the ability to distribute all of these products through a nationwide distribution system unrestricted by regulatory and legislative constraints.
—•—
A. Stevens Miles
Chairman, President, CEO
First National Bank of Louisville, Ky.
DREAMS FOR BANKING:
My dream for the future is for all restrictive regulations governing all financial services companies including banks to be eliminated so that each can compete fairly on a level playing field.
BIGGEST CHANGE TO AFFECT BANKING:
The most significant economic change that will occur over the next 25 years will be the development of a true international market. Countries will be doing what they do best, and each must learn to compete.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive of the future must learn to cope successfully with change. There will be plenty of it!
WHAT'S AHEAD FOR THE YEAR 2011:
A financial services firm in 2011 will be almost totally automated, but I believe that specialization still will exist.
—•—
William E.B. Siart
Chairman, President, CEO
First Interstate Bank of California, Los Angeles
DREAMS FOR BANKING:
The long-term objective of the First Interstate Bank system, in which First Interstate Bank of California plays a major part, is to be a nationwide provider of a wide range of financial services. The benefits to our customers in California are obvious—the convenience of nationwide access to our financial services network combined with personalized banking at the local level here at home.
BIGGEST CHANGE TO AFFECT BANKING:
The completion of the geographic deregulation process will affect financial services customers—really all of us—across the country. Increased competition will result in greatly improved products and services as banks fight to be the most profitable survivors in the industry. Customers will expect more. Improved technology will be important, but knowledgeable and friendly service will set the best banks apart.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Bank senior management must learn to manage change, not ignore or flee from it. Survival and success depend on understanding change—how it affects people and profits. Senior managers need to keep on top of the numbers and the human dynamics. Chief executives must seek out the new opportunities that offer the greatest payback and must instill their own enthusiasm for these new ideas throughout the organizations they manage.
WHAT'S AHEAD FOR THE YEAR 2011:
By 2011, banking will have broken its cookie cutter. Branches will come in a wide variety of sizes and service capabilities tailored to satisfy local markets. We'll see branches with instantaneous telephone access to customers through computers and without vaults or cash.
True service, however—the feeling that the institution really cares about the customers, whether serving them in person or electronically—will be a winner's distinguishing feature.
—•—
Louis H. Pepper
Chairman, President, CEO
Washington Mutual Savings Bank, Seattle
DREAMS FOR BANKING:
As a state-chartered nonmember mutual savings bank converted to stock form, we have been able to offer customers the services of our own full-service brokerage firm; to acquire and manage our own mutual fund complex; to acquire a life insurance company; to offer life and property and casualty insurance through our own insurance agency; to provide investment advice to individuals and institutions; and even to offer travel services through our own travel agency.
There are few services or businesses we want to add that current law prevents us from adding.
My dream for 2011 would be for my successors not to be faced with the constant threat of loss of these powers. I would hope that by then the securities and insurance industries would be enlightened sufficiently so they no longer would use their heavy political clout to deny the public the benefits of free competition.
BIGGEST CHANGE TO AFFECT BANKING:
The continuation of the calculation/communications revolution will reduce regional and locational advantages for many bread-and-butter financial products. For these products, the system that delivers them least expensively will be the system that survives.
Other survivors will be those that create their own special niche in the marketplace.
WHAT THE CHIEF EXECUTIVE WILL NEED:
All CEOs—today and in the future—should have a solid founding in humanities, even the classics. They should have a real understanding of the world and human nature. The technical side of things can be learned—or others can be hired to handle it.
WHAT'S AHEAD FOR THE YEAR 2011:
Financial services firms in 2011 will be firms that offer a full array of financial services, and products that will be available electronically. These probably will be large national organizations.
However, in addition to selling the transactional aspects of products, the successful financial services firms will sell knowledge—knowledge on how best to fill one's financial needs, and knowledge on how to use electronic systems.
Despite all the modern electronic delivery systems that will be available, I believe the customer still will want to deal with real people, at least from time to time. Therefore, there still will be banking or financial services offices in 2011. Someone may make a few dollars serving that customer's need.
The way things have been going lately, there may not be many of the present banks involved in financial services in the year 2011, because the present restrictions placed on major banks may leave them too far behind the retailers and securities firms to catch up.
—•—
John P. LaWare
Chairman, CEO
Shawmut Bank of Boston
DREAMS FOR BANKING:
A full spectrum of financial services including all securities powers now enjoyed by the investment banking industry.
BIGGEST CHANGE TO AFFECT BANKING:
Women and minorities will come to share equally with white males in management of business, political offices, and economic power.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The CEO will need to know how to deal more skillfully and effectively with the government bureaucracy and politicians. Ideally, businesspeople should be much more active personally in seeking state and federal political office.
WHAT'S AHEAD FOR THE YEAR 2011:
Full service firms might provide nationwide products in the following areas: deposits, loans, investments, underwriting of debt and equity; real estate development, management, and brokerage; insurance brokerage and underwriting; and mutual fund sponsorship, distribution, and management.
—•—
Joseph A. Rice
Chairman, CEO
Irving Trust Co., New York
DREAMS FOR BANKING:
The basic framework of the financial services company of the future exists today; it just is prohibited to commercial banks. I am referring, of course, to the wide range of financial services that can be offered by companies such as Sears, American Express, Prudential, and others.
Even these companies, however, have to comply with a labyrinth of legal requirements that make it difficult to deliver these services efficiently.
I hope that by the year 2011, the artificial walls that have been built around banking will have been dismantled long since. I believe that the financial services industry will comprise, at a minimum, commercial banking, investment banking insurance, mutual funds, and real estate brokerage. The full-service financial corporation in 2011 should be permitted to offer any or all of these services, wherever it believes that it can do so profitably.
BIGGEST CHANGE TO AFFECT BANKING:
In my view, the most significant social changes of the next 25 years will be the aging of the baby boom generation and the increasing necessity of caring for the elderly. Care of the elderly is currently inadequate, despite the fact that we have a substantial portion of the work force supporting the retired population. I see no signs of this need abating, as our life spans increase markedly.
Banking will play an important role in this situation. IRA and 401(k) plans will grow and become the core savings of many Americans. Banks will manage larger and larger pension funds and will administer these plans for the growing retired population.
As employers, we will have to adjust to an aging work force. Pension funds and Social Security will continue to be scrutinized as to their ability to support the aging baby boomers. In short, just as the baby boom generation caused historic changes in education and now the work force, it will force our society to adjust even more to its aging.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The executive of tomorrow must learn to run an organization that is both sufficiently professional and flexible to meet the changing social and political conditions that now are accelerating faster than ever. Banking has always been professional.
However, the nature of the profession is changing rapidly. One will have to pay attention to risk, as always, but there are many more things that will require attention, including technology, diversification, regulation, strategic and tactical planning, fast-changing markets, and keener competition.
Management is the name of the banking game today, and the bankers of tomorrow will learn to manage better than their predecessors, for the game will be more competitive and rougher.
WHAT'S AHEAD FOR THE YEAR 2011:
The legal barriers that divide insurance, mutual funds, investment banking, commercial banking, and real estate brokerage largely will have been removed by 2011. Additionally, the geographic barriers that restrict the activity of commercial banks will have been repealed as large regional and money center banks compete nationwide.
This is not to say, however, that all financial services will be delivered by large financial supermarkets. While companies like American Express, Sears, and Citibank will cater to this market, many firms, large and small, will continue to deliver more selected ranges of products on a more personal level.
Community banks will continue to compete with the larger superregionals and financial supermarkets for the average consumer's banking needs; insurance brokers will tailor insurance packaged for both corporate and individual needs; money will be managed by small aggressive money managers and mutual funds; and deals will be structured by investment banking houses that remain independent of any bank or other financial services company.
—•—
Gordon C. Luce
Chairman, CEO
Great American First Savings Bank, San Diego
DREAMS FOR BANKING:
I would like to see two major steps taken: parity for the savings and loan industry with commercial banks; and all interstate banking barriers removed.
BIGGEST CHANGE TO AFFECT BANKING:
Several events will continue to unfold, which collectively will have great impact on the business: further deregulation, emergence of international markets, growth of minority population groups, acceptance of home banking by consumers, and major consolidations of financial companies.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Accessing capital markets, the impact of electronics on the industry, and increased marketing skills will be extremely vital areas in the future.
WHAT'S AHEAD FOR THE YEAR 2011:
Consumers will be able to conduct most banking affairs from their homes and businesses via computers. There will be fewer financial institutions following a period of consolidation, but the breadth of services available at each will be much wider than it is today.
After all, who would have believed 10 years ago that by 1986, savings and loans would be involved in such activities as brokerage services, direct real estate development, and insurance products?
—•—
Alfred Brittain 3d
Chairman, CEO
Bankers Trust Co., New York
DREAMS FOR BANKING:
By 2011, the Congress will have come to recognize the extent to which the Glass-Steagall Act is an anticompetitive relic. So, I would expect that what now are called commercial banks will be competing directly with investment banks and with other financial services companies, each of us providing an unrestricted range of services to the market.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The principal talent of the future CEO will be the ability to create an environment in which very bright, unusually creative, and highly motivated people will flourish.
The principal challenge to the chief executive of the future, then, will be the one that exists today.
—•—
Jerry V. Jarrett
Chairman, CEO
AmeriTrust Company NA, Cleveland, Ohio
DREAMS FOR BANKING:
Providing a full range of financial services without restriction due to regulation, especially mutual fund management, insurance, real estate brokerage, and so forth, or in any market in which we felt that we could compete, will be our biggest dream.
BIGGEST CHANGE TO AFFECT BANKING:
I believe that a significant economic change will be the continued growth through consolidation of regional banks as geographical deregulation continues, making very large regionals able to compete head to head with money center and foreign banks. Both corporate and retail customers will benefit from increased competition.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive will have to identify the needs of his or her employees, and to strive to fulfill those needs through challenging opportunities so that the best people can be retained. Banking, with all its changes and electronics, still will be a very people-oriented business.
WHAT'S AHEAD FOR THE YEAR 2011:
The firm of the year 2011 will be heavily automated, with on-line information to assist either electronic delivery of services or human delivery. The use of paper checks will decline as debit cards finally succeed. Convenience of branch locations still will be important.
—•—
Willard C. Butcher
Chairman, CEO
Chase Manhattan Corp., New York
DREAMS FOR BANKING:
Clearly, the world's financial markets have become increasingly globalized and the participants in those markets increasingly homogenized. It is ludicrous, therefore, to continue to regulate American banks by their historical status as commercial banking institutions rather than by the nature of their new participation in financial services.
I look forward to the day in the near future when those who legislate and regulate the banking industry will regard all purveyors by the services they render rather than by their historic roots as insurance companies, investment institutions, or commercial banks.
BIGGEST CHANGE TO AFFECT BANKING:
I'll steer clear of economic or political forecasting—a sure way to fulfill the old maxim that if you live by the crystal ball you'll end up eating ground glass. I'm much more certain of the financial implications of a social change we can see happening right now and that over time will become more significant.
I refer to the aging of America. The subject has received a lot of popular discussion but surprisingly little close analysis—particularly of its impact on net savings and investment, which has great economic and financial significance.
As the so-called baby boomers approach retirement—and in the year 2011, those born in 1946 will reach 65—there will be a tremendous surge in savings and investments of all types to fund the retirement years. The enormous pool of liquid capital this will create will be seeking the highest returns. The questions of who will control these funds and how they will be managed have economic, social, and political implications—all interconnected.
It is profoundly disturbing to see so little forward thinking, today, about a reality that is only a few years down the road.
WHAT THE CHIEF EXECUTIVE WILL NEED:
I'm not so sure that "new things" should be the future CEO's primary concern. If you're designing an educational program for the man or woman who will head this bank—or, in fact, any major corporation—in 2011, should you really be concentrating on issues such as accounting, convertible stock premiums, even risk management, which is central to a financial institution's mission?
I question that very much. I'm not suggesting those are unimportant, and they should be taught. But they are nuts and bolts, trade-school issues.
The ones that I think should dominate are issues like: What makes Johnny run? How do you motivate? What factors affect organizational behavior? How do you conduct your business in such a way that society will respond positively to your efforts?
Going to bedrock, the overriding attribute that a chief executive must have—today and in the future—is the ability to project a vision, a set of aspirations, for the institution that will drive all its activities, then communicate that vision forcibly and articulately, and finally, ensure that every person, at every level, owns the vision and is committed to it totally.
It is only through such a unified approach that an institution can focus its strategies, structure, people and culture on successfully attaining its business objectives. That's what we are doing at Chase.
WHAT'S AHEAD FOR THE YEAR 2011:
To start, let's look first at what the financial landscape of the next century might be like. Certainly, sophisticated money management will no longer be the sole purview of huge corporations with large treasury staffs. Instantaneous investment choices will be readily available to even the smallest factory owner, who will only have to switch on his personal computer—maybe strapped to his wrist—to swap his variable rate loan for a fixed rate loan, or to request a letter of credit to import spare parts.
Consumers will have similar capabilities. With equal ease, they will buy and sell French francs, dollars, yen, or European currency units (ECU) from their homes, offices, or automobiles, based on market advice delivered electronically. They will be able to choose among a $5,000 U.S. Treasury bill, a participation in a loan to a German multinational, an ECU-denominated mutual fund, or a Swiss-franc-denominated security of a Brazilian company.
Looking out to the 25-year horizon, I think we may see perhaps a dozen financial giants capable of operating effectively in what will be a truly global economy. Coexisting with the financial giants, a number of other institutions will compete successfully in local, regional, and national markets.
Industry leaders will have redefined banking. Bankers will be financial architects, designing and adapting for their customers a complex array of financing alternatives and products—investment banking advisory services, along with cash management, financial modeling, and other tools in support of executive decision making.
How will individuals conduct their banking business? I see them banking at shopping centers, supermarkets, gas stations, restaurants, and retail merchants, as well as in their own homes. But banks, large and small, also will offer specialized services tailored to the needs of distinct customer groups, like students, professionals, young families, retirees, and single people, while providing the intimacy of boutique shopping.
Recognizing the importance of technology to the industry, the forward-looking firms 25 years from now will have invested—and will be investing—substantial capital in research and development in areas like telecommunications and artificial intelligence.
—•—
Frank E. McKinney Jr.
Chairman, CEO
American Fletcher National Bank, Indianapolis
DREAMS FOR BANKING:
In the year 2011, all companies engaged in financial services will be neither restricted in the products and services they offer, nor will they be hindered by state lines in determining their marketplaces. By that time, American Fletcher will be part of a major Midwest-based financial services entity with the potential to serve customers throughout the United States and its territories.
BIGGEST CHANGE TO AFFECT BANKING:
During the next 25 years, the United States will face even stiffer competition in the international marketplace, as more and more companies discover and/or enhance their industrial and agricultural capabilities. At home, Americans will become more sophisticated when shopping for financial services. The challenge will be to deliver financial services when and where the consumer wants them, and in a profitable manner.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The future CEO will need more than a business or legal background. A thorough knowledge of a bank's customer base also will be required. This will apply not only to retail customers but also to all segments of a bank's customer market.
Further deregulation also will result in increased competition, so even more financial intermediaries will be seeking the customer's business.
The CEO will become an astute marketer of financial services, able to fulfill the needs and desires of customers through a keen knowledge of marketing. Not only will the CEO need to be cognizant of high-tech banking, but he or she also will have to emphasize high touch, that personal quality of services and delivery systems that will set a bank on a level above that of the competition.
WHAT'S AHEAD FOR THE YEAR 2011:
In the year 2011, a financial services entity will be able to offer a broad range of products and services without geographic limitation and with minimal regulation.
It will be a comprehensive institution continuing to offer basic banking services but allowing a customer to choose from an increasingly diverse array of investment alternatives, all forms of insurance, investment banking services, and more.
—•—
John G. Medlin Jr.
Chairman, CEO
Wachovia Bank and Trust Co. NA, Winston-Salem, N.C.
DREAMS FOR BANKING:
We would like to have the same opportunity to compete as other providers of financial services and to be providing those services to whatever customers and geographic markets make good sense for First Wachovia Corp.
BIGGEST CHANGE TO AFFECT BANKING:
Slower growth in federal spending, smaller federal deficits, more moderate money supply growth, slower expansion of international trade, and less positive demographics are the forces and factors which will dominate the environment for the rest of the century.
Market forces and public policy will continue the trend of deregulation. However, the overall climate will be quieter and less change oriented, and economic growth will be slower and money markets less volatile.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Chief executives should be learning how to manage and succeed in a slower growth and less inflationary environment that is more unforgiving of speculative and unsound practices and behavior.
Adherence to time-proven fundamentals and principles will be more important, while creativity and vision of a practical and sensible nature will continue to be rewarded.
WHAT'S AHEAD FOR THE YEAR 2011:
There is still likely to be compartmentalization of financial services firms into the regulated and unregulated categories, but the differences gradually will become more blurred.
In the two categories, some will continue to be more specialized or limited in terms of geographic scope and services offered, while others will expand to more nationwide status.
The difference between today and 2011, however, may be less dramatic than some might project.
—•—
Carl E. Reichardt
Chairman, CEO
Wells Fargo Bank NA, San Francisco
DREAMS FOR BANKING:
We have no fantastic dream for banking. Our strategy is to be an excellent commercial bank, not a financial services conglomerate.
BIGGEST CHANGE TO AFFECT BANKING:
We will become an information-based society. Information about money, accounts, and financial trends will be an increasingly important product in the financial services industry. The bank (business) that can provide the best, most credible information will be most successful.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive really will need nothing new. Traditional values/goals will be as important in the future as they are now. These include how to achieve a solid return for shareholders; how to provide the best possible product or services for the customer at the most competitive price; how to perceive often subtle changes in the marketplace; and how to maintain the flexibility to be able to react to such changes rapidly.
WHAT'S AHEAD FOR THE YEAR 2011:
Continued growth of automation in banking will result in self-service financial centers to handle more types of transactions. Banks will handle fewer—if any—personal transactions in their lobbies. More and more transactions will be handled at the point of sale, with debit cards increasingly replacing checks, cash, and personal loans.
Bankers of the future will be concerned more with the selling function, helping customers make sound choices among the numerous available options, to meet personal financial plans and goals in an information-based society.
—•—
Joseph F. Hammele
President, Chief Operating Officer
Rochester Community Savings Bank, N.Y.
DREAMS FOR BANKING:
I dream of a true one-stop-shopping financial center that is able to take care of people's financial needs throughout their lives.
I dream of systems that are immune from error, systems that free people to do what people do best, which is thinking, planning, and interacting with others. I dream of a time when customers will never have to wait for service.
BIGGEST CHANGE TO AFFECT BANKING:
I'd like to think that in the next 25 years, we'll become more of a one-world society, with a free international economy. A society where the free enterprise system will flourish, where cameras will be made or wheat grown where these activities can be done best, unrestricted by territorial boundaries.
Clearly, this type of economic/political change will have a far-reaching impact on the banking system, both here and abroad. As we become more open with each other, we'll have more opportunities for positive interaction.
Even if we become just a fraction more like a one-world society, it will have implications for the way we do business. There is already becoming more of a world market for financial products and services, just as there is for industrial goods. The speed of communication and the influence of advanced technology will accelerate this trend and will also have an enormous impact on the world financial services industry.
WHAT THE CHIEF EXECUTIVE WILL NEED:
To continue this line of thought, the chief executive of the future should become more in touch with international economics and how these trends might affect his or her business. The individual at the helm must disregard parochial concerns and embrace a more global way of thinking.
More important, he or she should be willing to exchange old ways of doing things in favor of new ideas and a spirit of openness and creativity. No financial institution today will survive into the next century by maintaining the status quo. It's a changing industry, and only those that embrace change willingly will survive.
WHAT'S AHEAD FOR THE YEAR 2011:
We'll have instantaneous transactions—error free, of course. The customer and our internal money managers will have access to complex analyses of alternative investments in a fraction of a second. Sophisticated technology will be at our customer's finger tips—not only at the bank, but at home via computer/television hookup. An enormous amount of data and information will be available to facilitate management decisions; access to services will be quick and comprehensive.
For interpretation of the data or counseling, the customer will still turn to man, not machine. And so we'll harness this powerful technology to support us in what we do best as people—which is to interact with others of our species. We'll be staffed by a well-educated, creative, friendly staff who will be able to offer their customers advice regarding every financial service or product conceivable.
—•—
Richard Ravitch
Chairman, CEO
Bowery Savings Bank, New York
DREAMS FOR BANKING:
In the future, the lines between financial services institutions will become increasingly blurred, and banks will be building business in new areas. We would like to provide a financial supermarket of products and services for one-stop shopping—insurance, real estate brokerage, travel related services, relocation services, tax preparation, and investment banking functions.
BIGGEST CHANGE TO AFFECT BANKING:
Women and minorities will continue to join the work force, reshaping the labor pool and changing work force norms as we know them.
Additionally, companies will become more responsive to the needs of working parents, providing day care, maternity leave, paternity leave, and flexible hours.
WHAT THE CHIEF EXECUTIVE WILL NEED:
As banks will rely more and more on personal computers and video to sell and process products and services, the CEO of the future must be comfortable with technology.
He or she also must be knowledgeable about marketing, as deregulation will make financial institutions more competition-driven.
Finally, the CEO will need to develop investment banking expertise, to meet the challenges of an ever-complex economy.
WHAT'S AHEAD FOR THE YEAR 2011:
By 2011, banks will have undergone their version of the industrial revolution, with robots and computers taking over tasks such as teller functions and transaction processing.
Much of financial services interaction will be done via computer from the home—customers will open their own accounts and have constant access to cash through personal automated teller machines.
As a result of these changes, the traditional banking floor will be reorganized to provide a boutique-like atmosphere of financial concessions, with private offices for consultations.
—•—
Robert Strickland
Chairman, CEO
SunTrust Banks Inc., Atlanta
DREAMS FOR BANKING:
The only thing for sure is that banking will bear little resemblance to what we see today, and the challenge will be to adapt to the changing environment.
BIGGEST CHANGE TO AFFECT BANKING:
I would hope there would be a significant reduction in the national debt.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive will need an enhanced ability to provide leadership and to manage people with maximum effectiveness.
—•—
Richard G. Tilghman
President, Chairman, CEO
United Virginia Bankshares, Inc., Richmond
DREAMS FOR BANKING:
While we're likely to see a number of changes in the industry over time, our basic business of taking deposits and extending credit will continue.
Given that, my dream is not so much along the lines of a specific capability or service that we do not enjoy now, but rather our continuing to have the people and other resources necessary to execute our goals in a truly excellent fashion.
BIGGEST CHANGE TO AFFECT BANKING:
Optimistically, I would like to think that somehow we will manage to reduce or eliminate the national debt. We've had a number of starts and stops on this issue over the years, but I do believe that we've seen a growing focus on and commitment to it. Substantially reducing or eliminating the national debt will have a cascading impact on our economy and create a far more healthy environment for financial services.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Above all else, CEOs need excellent people skills. The ability to motivate an organization and lead it toward common goals is a given in any industry.
That aside, I see a need for more CEOs to develop greater technological literacy. Technology is no longer a necessary evil. It has become a highly competitive weapon and will be even more so in the future. The CEO who understands this gives his organization a greater opportunity to succeed in the marketplace.
WHAT'S AHEAD FOR THE YEAR 2011:
By the year 2011, technology will have taken quantum leaps, interstate banking will be old news, and financial institutions will be able to offer virtually any product.
There undoubtedly will be some very large nationwide firms that offer a vast array of products over a wide geographic base. There will be others who concentrate on serving a finite geographic market in an excellent manner. Still others will focus on a specific set of products distributed within a specialized niche.
As always, competition will be intense. And, as always, people will continue to spell the difference between success and failure.
—•—
Edward E. Crutchfield Jr.
Chairman, CEO
First Union Corp., Charlotte, N.C.
DREAMS FOR BANKING:
One would hope that the year 2011 will see further deregulation of banking so that the customer can be offered a simplified menu of products to serve his financial needs.
Since 2011 is 25 years away, it is fascinating to contemplate what the specifics of that menu might contain. I'd say it will be a mutation of a lot of services that already exist—an extension of them.
For example, instead of a checking account the way it is now, I could easily see a Buck Rogers-type thing, an electronic checking account where you push a button or use a hand-held calculator to activate the account.
We're going to be looking at a very accessible bank account with very little physical dimension to it that can be activated from remote areas, such as Europe, maybe with something the size of a calling card. You'll be able to go into a bank in Paris, hand it to the banker, and access your account at home. It will be like carrying a 24-hour bank around in your billfold.
BIGGEST CHANGE TO AFFECT BANKING:
I would expect a continued Europeanization of the American social, economic, and political scenes. Specifically, we may see a gradually more conservative electorate.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive of the future will need to have a broader based knowledge of financial services. Perhaps the single most important characteristic will be an intuitive grasp of change itself.
WHAT'S AHEAD FOR THE YEAR 2011:
A financial services firm in the year 2011 might be national/regional in geographic scope, offering full-service banking in the modern context, together with brokerage, insurance, and a strong menu of yet to be born products.
—•—
Bruce G. Willison
Chairman, CEO
First Interstate Bank of Oregon, Portland
DREAMS FOR BANKING:
For the year 2011, I would hope for regulatory fairness that allows true competition between all sectors of the financial services industry.
BIGGEST CHANGE TO AFFECT BANKING:
Over the next 25 years, I expect changing lifestyles and their effect on consumers' financial behavior to affect the banking industry the most.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Understanding the transition from a regulated industry with captive markets to a less regulated, merchandising approach, will be the biggest task for the chief executive over the next 25 years.
WHAT'S AHEAD FOR THE YEAR 2011:
By the year 2011, the financial corporation will be able to offer the full array of consumer and institutional products and services and will be able to serve as a single-source supplier of financial products.
—•—
Thomas R. Williams
Chairman, CEO
First National Bank of Atlanta
DREAMS FOR BANKING:
By the year 2011, I would hope to operate a leading full-service financial services enterprise that can provide a complete range of competitive financial products to meet the needs of small and large accounts alike.
Critical to this happening is the role government plays in regulating the industry. Free enterprise in the open marketplace has proved to be a true test for separating weak performers from strong ones. The government's role should focus on ensuring the safety of deposits, not hindering competition.
BIGGEST CHANGE TO AFFECT BANKING:
Federal prohibition against the interstate expansion of financial institutions will change, with the change favoring reasonable expansion. This, along with the lifting of restrictions on bank services through the demise of the Glass-Steagall Act, will open the doors for all deposit-taking institutions to operate in one financial services industry with equal powers among competitors.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The CEO of the future must be more of a manager, less a technician. He must thoroughly understand the tools of his trade (economics, accounting, credit analysis, planning, marketing, leadership, computer sciences, and industrial psychology), but primarily he must be a leader, a strategist, and an organizer.
WHAT'S AHEAD FOR THE YEAR 2011:
Twenty-five years from now, there will be only a few giants with global markets in the financial services industry. There will be major regional institutions and local community operations, all with special market niches.
—•—
Lloyd P. Johnson
Chairman, President, CEO
Norwest Corp., Minneapolis
DREAMS FOR BANKING:
I would like to see banks able to compete in any aspect of the financial services business and in any geographic market of their choosing—in other words, to be able to open an office, make an acquisition, or sell any product, whenever and wherever we choose.
BIGGEST CHANGE TO AFFECT BANKING:
Banks, savings and loans, credit unions, investment bankers, insurance companies, and retailers will have authority to enter freely into each other's businesses over the coming years.
This will not mean that all institutions will be in all things. Then, as now, firms will specialize. The only difference will be that firms will choose to specialize because they feel they have a distinct advantage in one field or another, not because doing so is mandated.
Following a substantial shakeout of many financial services companies, we likely will see re-regulation set in. Our customers, more and more, will come from an aging population.
WHAT'S AHEAD FOR THE YEAR 2011:
Banks, savings and loan associations, and credit unions will be virtually gone as we know them now. In their place, we will see either highly regulated—perhaps even nationalized—banks, or some 10 or so very large national financial services firms and hundreds of medium-sized niche or geographic entities providing a broad range of financial services.
Most, if not all, transactions will be performed electronically.
—•—
Luke A. Baione
Chairman, CEO
CrossLand Savings, Bank, FSB, Brooklyn, N.Y.
DREAMS FOR BANKING:
We would want to be a provider of a full range of financial services on a nationwide basis.
BIGGEST CHANGE TO AFFECT BANKING:
The most significant change will be the tax reform bill recently passed by Congress.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The CEO of the future should be knowledgeable in computer management and the management techniques needed to handle broad geographic diversification and/or decentralization. Also, the CEO will need continuing education in financial market analysis.
WHAT'S AHEAD FOR THE YEAR 2011:
Financial services in 2011 will enjoy the interstate retail franchise, a nationwide retail network of automated teller machines offering the consumer financial services ranging from traditional banking, brokerage services, and insurance products to home banking.
—•—
Frederick Heldring
Chairman, President, CEO
Philadelphia National Bank
DREAMS FOR BANKING:
I would like to think that Philadelphia National Bank, itself or in concert with sister companies of CoreStates Financial Corp., would be allowed in the future to compete freely and fairly with all businesses engaged in financial services.
BIGGEST CHANGE TO AFFECT BANKING:
Demographically, the aging of America will shift society's thinking about financial affairs towards greater emphasis on the preservation of wealth as well as other conservative values.
At the same time, the extension into all areas of life of applications of computer and telecommunications technology will have as yet unknowable effects on the ways in which individuals and groups of society interact with each other.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The critical factor will continue to be an ability to understand and deal with people—if anything, to deal with an even wider range of beliefs and values and with an employee mix weighted much more heavily to highly skilled, highly educated specialists and relationship managers.
WHAT'S AHEAD FOR THE YEAR 2011:
In many respects, the year 2011 will not be that much different than today.
Operations and information handling will be thoroughly automated and communications linkages far more extensive. Information technology will allow clients to have services tailored precisely to their individual circumstances, almost to design their own accounts. Possibly, this also will mean that most financial services will be provided by specialist firms dealing with market segments.
—•—
Dale S. Hanson
President
First National Bank, St. Paul, Minn.
DREAMS FOR BANKING:
A banker's dream is the ability to offer the quality and types of financial services that effectively meet customers' needs. We look forward to a future where we will not be limited in how we can provide customers solutions.
BIGGEST CHANGE TO AFFECT BANKING:
There will be a gradual disappearance of differences between banks, investment banks, savings and loan associations, brokerage firms, and insurance companies. Those who can meet the customer's needs best will prosper.
WHAT THE CHIEF EXECUTIVE WILL NEED:
We should never stop learning. The future will see changes in the services we provide and the way we provide them. It also will bring changes in management techniques. By anticipating the opportunities these changes will bring, we can provide superior customer service and meaningful employment for our employees.
WHAT'S AHEAD FOR THE YEAR 2011:
We will offer a wide variety of financial services to meet our customers' needs. Technologies will alter some of the ways we do business. But we will always try to be responsive to our customers, employees, and the communities in which we do business.
—•—
Donald F. McCormick
Chairman, CEO
Howard Savings Bank, Livingston, N.J.
DREAMS FOR BANKING:
In the year 2011, I would like to see banks providing more efficient customer service through cost-effective electronic delivery hardware and software systems. Many of the innovative systems I envision are currently in the embryonic stage. Some have not yet been conceived.
These systems would provide more direct customer access to financial services and eliminate virtually all back office manpower support. Some of these systems are beginning to appear on the banking scene, such as customer service centers, which provide telephone access to bank information and services, and home banking through personal computer hookups.
BIGGEST CHANGE TO AFFECT BANKING:
In the next quarter century, I expect to see significant advances in the internationalization of social, political, and economic systems.
Government and peoples of the world will become increasingly dependent on the strengths and weaknesses of each other's economic systems, as well as in their political and social conditions.
Figuratively, the earth will shrink smaller and smaller, with isolationism disappearing from the scene and a new wave of world economic and social cooperation taking hold.
WHAT THE CHIEF EXECUTIVE WILL NEED:
There is nothing new that a chief executive needs to learn to cope with what lies ahead. A CEO's principal responsibility is to identify and position quality people in the organization, then manage and motivate them to benefit the bank's service, productivity, and profit performance.
Consequently, a CEO needs only to continue improving his or her ability to manage and motivate people in order to successfully cope with situations in the future.
WHAT'S AHEAD FOR THE YEAR 2011:
The financial services firm in the year 2011 will not be much different from the financial services firm of today, just as the present institution is not very different from the institution of 25 years ago in 1961.
There will be many types of financial services institutions in 2011, just as there are today. There will be generalists and there will be specialists, although there may be a difference in the areas of specialization. There also probably will be a more sophisticated breed of financial services provider than there is today.
There will not be, however, one stereotype of a financial services institution. The needs of our customers are too varied and complex to be served by a single "all things to all people" type of institution.
—•—
C.A. Cutchins 3d
Chairman, CEO
Sovran Financial Corp., Norfolk, Va.
DREAMS FOR BANKING:
We would hope that by 2011 we will be able to offer a complete range of financial services in a free competitive environment, to offer the consumer the types of financial services he wants and needs where he wants and needs them.
One a more short-term basis, we would like to see banks able to offer insurance above and beyond that in relation to credit, to have securities brokerage options available, and to be able to offer real estate services to our customers.
BIGGEST CHANGE TO AFFECT BANKING:
We feel the current shift from a manufacturing society to a society based and interacting on information and services will affect banking significantly. Our ability to serve our markets is based upon our ability to accumulate and process information and to provide superior service.
Technological changes will enable us to enhance our service capabilities, and this, coupled with deregulation, will prompt enormous change.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive officer of tomorrow will need to be flexible—to be able to adapt to, ride on the crest of, and take advantage of, change. To manage change is the challenge of the future.
WHAT'S AHEAD FOR THE YEAR 2011:
Financial services firms will be more customer-sensitive than ever by the year 2011. As we shift to an information and services society, consumers will become increasingly sophisticated. We will need to segment and package services according to consumers' needs and wishes.
In addition to various terminals that will handle day-to-day account transactions, individual financial advisers will deal with the public and sell services.
—•—
Harry B. Brock Jr.
Chairman, CEO
Central Bank of the South, Birmingham
DREAMS FOR BANKING:
That a commercial bank will be able to offer the full line of financial services—that is, brokerage, insurance, and real estate development.
BIGGEST CHANGE TO AFFECT BANKING:
Twenty-five years is too long to contemplate, but during that period we will have at least one period of serious inflation, and high interest rates to go with it. Government also will be playing a bigger role in our business.
WHAT THE CHIEF EXECUTIVE WILL NEED:
More attention to management skills. Being only a good credit administrator will not get the job done. Sales managers will be in great demand. Sales organizations are built from the top down.
WHAT'S AHEAD FOR THE YEAR 2011:
You will have many salespeople on the front line interfacing with a central core of experts on a complete line of financial services. These salespeople will be on full commission. The experts will be on salary plus incentives. The company will be sales-driven in a manner similar to the way insurance companies have operated. Cross-selling will be for real and not a buzz word.
—•—
Robert J. Malone
President, CEO
First Interstate Bank of Denver NA
DREAMS FOR BANKING:
Banking history has shown slow but steady progress toward increased convenience and service to bank customers. I would hope that legislative barriers would continue to erode to allow both geographic expansion and the emergence of new financial products.
BIGGEST CHANGE TO AFFECT BANKING:
During the next 25 years, consumers will take more control over their personal finances through home banking.
WHAT THE CHIEF EXECUTIVE WILL NEED:
In addition to business training, the successful bank executive must gain a greater awareness of society in general and the flexibility to deal with rapid change.
WHAT'S AHEAD FOR THE YEAR 2011:
Financial services will be transformed by the merger of now distinct entities, including savings and loans and brokerage houses.
—•—
Frederick S. Hammer
Chairman, CEO
Meritor Financial Group, Philadelphia
DREAMS FOR BANKING:
My dream for the future is that one financial institution will be able to serve all of a customer's financial services needs, from cradle to grave.
BIGGEST CHANGE TO AFFECT BANKING:
Aside from the very real possibility of a major war or nuclear terrorism, the most significant change affecting banking will be increased government intervention in all businesses. As it will affect financial services, the principal consequence will be an increasing number of suppliers and elimination of traditional sources of profitability.
Attempts to reregulate the financial services industry, which continues to suffer the consequences of decades of tight governmental restrictions, will only increase costs, while inevitably permitting significant market penetration by competitors not, or not fully, subject to those restrictions.
The trend toward reliance on loan origination and servicing income as opposed to interest rate spread, therefore, will accelerate.
The good news will be that consumers will enjoy a wider availability of efficiently produced financial services. The bad news is that many of the traditional providers will be unable to cope with change and will disappear from the economic scene. The effect on the overall economy will be good, but some stockholders and managements will be hurt.
It is entirely possible that one or more of the top 10 banks will go out of business in the next 25 years. The question bankers should be asking themselves today is: "Is expansion relevant when change is the critical element that has to be accommodated?"
WHAT THE CHIEF EXECUTIVE WILL NEED:
The CEO of the future will be spending an increasing share of his or her time dealing with the legal and regulatory challenges to the viability of his or her institution.
The job of CEO will become more complex, as he or she must attend to the fundamentals—marketing, asset quality, technology, service quality, and attracting and nurturing talented people—while at the same time coping with an environment that grows more hostile, with legal and regulatory inertia that makes it more difficult to implement the necessary changes the institution must make to remain successful.
WHAT'S AHEAD FOR THE YEAR 2011:
In the year 2011, wide applications of technology will have shifted the back office past the front office into the hands of the customer. This will afford a greater communication of service for a wider range of customers and will permit bankers once again to become personal advisers rather than transaction processors.
—•—
Robert Van Buren
Chairman
Midlantic Banks Inc., Edison, N.J.
DREAMS FOR BANKING:
Midlantic intends to solidify its position as a leader in banking and in the financial services industry. In doing so, we would hope to be able to provide our customers with an even more complete range of services.
We hope we will be able to provide these programs in an environment where competition is fair and where there is equality among all types of financial services firms.
BIGGEST CHANGE TO AFFECT BANKING:
The internationalization of the financial markets will bring greater economic, social, and political volatility to the banking industry, and to society as well. At the same time, continuing enhancements in technology will change many of the traditional operating procedures of the industry.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive of the future should be acquiring an improved knowledge of an ever-increasing array of technological changes.
—•—
James N. von Germeten
Chairman, CEO
Boston Safe Deposit & Trust Co.
DREAMS FOR BANKING:
My dream is to be permitted to offer a truly complete package of financial services. Regulations that have been in effect for the past 50 years place constraints on the industry, preventing customers from getting the best products at the best prices.
Clearly, the industry is moving toward an integrated banking system that will provide access to an extensive information network. This will help us examine an individual's total assets and liabilities, allowing us to make better decisions for our clients. My hope is that this trend will accelerate, because our clients will be the beneficiaries and the confidence they express in us as financial advisers will be rewarded with excellence in service and performance.
BIGGEST CHANGE TO AFFECT BANKING:
The continuing information revolution created by new technology will be the most significant change. The stock exchanges now process more trades in a day than they used to be able to handle in a week.
Similar profound changes are revolutionizing the banking industry. Within the next 25 years, all financial service customers—individual and corporate, large or small—should be able to use computer terminals to shop for a wide range of financial products at competitive prices.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Future CEOs will need to be sensitive to changes in the marketplace brought about by the gradual dissolution of old regulatory barriers. CEOs with vision will be able to expand into a new, highly competitive marketplace, using technological tools and providing competitive, consumer-oriented products.
WHAT'S AHEAD FOR THE YEAR 2011:
The financial services firm of the future will be comparable to the shopping complexes in the Quincy Market area in Boston, or Ghirardelli Square in San Francisco—arcades offering a wide array of products and services under one roof. Customers will be able to purchase all their financial services at one institution, if they so desire, or select products offered by competing companies.
There will be national firms taking advantage of interstate banking, while specialty banks cater to the needs of a particular marketplace.
Above all, customers will be different in the year 2011. They will have instant access to vast amounts of data via personal computers with telephone links. They will be better informed and will demand from us attractively priced, sophisticated products. After years of maturing as an industry while under restrictive regulation, the financial services industry is entering a stimulating new era of competition and technological change. And it is the customer who will benefit most.
—•—
Paul A. Willax
Chairman, CEO
Empire of America Federal Savings Bank, Buffalo
DREAMS FOR BANKING:
Through a very small (about the size of a telephone beeper today) and a very powerful microcomputer that uses artificial intelligence capabilities—an electronic pal, if you will—Empire of America customers in 2011 will have instantaneous access anywhere around the globe, or wherever humankind has established outposts, to a complete array of financial products and services.
BIGGEST CHANGE TO AFFECT BANKING:
Capitalism and the incentive enterprise system will be much more widespread in the world than forms of socialism ranging through communism.
Already the communist Chinese colossus had thrown open the windows of its once-closed society to the winds of free enterprise.
Even the Soviet Union, now exploring Yugoslavia's and Hungary's successes with economic incentives, will move away from its strict adherence to Marxist-Leninist doctrine. The communist world, with its billions of adherents and thousands of untapped markets, will prove fertile soil for the entrepreneurial enterprises of 2011.
WHAT THE CHIEF EXECUTIVE WILL NEED:
To the greatest extent possible, the chief executive of tomorrow must anticipate and prepare for every contingency that could influence—for better or worse—his or her business.
Today and even more so in the future, events will unfold too rapidly for lengthy deliberation. Success will accrue to businesses that prove most prescient.
WHAT'S AHEAD FOR THE YEAR 2011:
Far fewer and far larger firms will dominate the financial services landscape in the year 2011. Almost every company will have multistate operations and many will be multinational corporations. Customers will interact with their institution almost exclusively via computer and other automated systems.
—•—
Thomas M. Miller
Chairman, CEO
Indiana National Bank, Indianapolis
DREAMS FOR BANKING:
It's a utopian ideal, perhaps, but wouldn't it be nice if all businesses offering financial services could be treated and regulated equally, and if each of them—whether commercial bank, retail operation, investment bank, etc.—could be permitted to offer the same services if they so desire?
BIGGEST CHANGE TO AFFECT BANKING:
Consolidation will continue at a rapid pace. Nationwide banking will become a reality, through both holding company expansion and branching. As market fragmentation continues, it will become increasingly difficult to meet every service need of every customer. The industry will continue its present trend of becoming less people-oriented as electronic expertise grows.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive certainly will need to recognize who the true competitors may be in the future. The greatest competitor no longer may be his or her traditional rival in the banking industry; it may be a retail store or perhaps a venture capitalist.
Bankers must continue to identify emerging markets, both geographic and demographic, and develop specialized services and expertise to serve them more effectively than the competition.
—•—
William F. Farley
President
First Bank Minneapolis
DREAMS FOR BANKING:
I dream of seeing market-regulated financial institutions whose success depends on the ability to provide services of value to customers and whose range of activity can be as broad as necessary to meet customer demand.
Funding for such an institution would come from intelligent investors who make deposits with the same care with which they make investments.
BIGGEST CHANGE TO AFFECT BANKING:
I see as the biggest change to affect our industry in the future, the gradual disappearance of differences between banks, investment banks, savings and loan associates, insurance companies, and so forth.
WHAT THE CHIEF EXECUTIVE WILL NEED:
Business success comes from anticipating and understanding customers and their needs for products and services. If chief executives can be successful at this, the future will be bright.
We also should view our employees as customers. Understanding them and meeting their desires, expectations and ambitions for the future will enable managers to effectively implement the plans to meet external demand.
WHAT'S AHEAD FOR THE YEAR 2011:
The financial services firm of the year 2011 will have to be flexible and responsive to its customers. Undoubtedly, bank services will be broader and more automated. However, the need for personalized customer service always will be tantamount to a bank's success.
—•—
Charles J. Zwick
Chairman, CEO
Southeast Bank NA, Miami
DREAMS FOR BANKING:
We hope to have the freedom to undertake financial services and to provide financial products now restricted by the Glass-Steagall Act.
BIGGEST CHANGE TO AFFECT BANKING:
The biggest change will be the continued integration of financial services worldwide.
WHAT THE CHIEF EXECUTIVE WILL NEED:
The chief executive will require a better focus on marketing activities and managing for profitability.
WHAT'S AHEAD FOR THE YEAR 2011:
There will be a wider variety of styles among institutions, but they will be better managed than current institutions.
