National Commerce Financial Corp. in Memphis has added marketing advice to its slate of consulting services for banks.
NCBS Strategic Marketing Solutions was introduced quietly in February through National Commerce Bank Services Inc., a 17-year-old subsidiary that helps retailers and banks develop in-store banking strategies. The marketing venture sprang from a customer data marketing unit and now counts National Commerce and other banks as its customers.
The marketing business teamed up with Synapse Technology, a Charlotte company that makes software designed to help banks analyze deposit trends and retain customers. Besides developing marketing programs, NCBS Strategic Marketing manages direct mail campaigns for bank clients and helps them with e-mail and other customer communications.
Trish Springfield, a senior vice president and sales director for National Commerce Bank Services, said consulting services "have really expanded as our clients have asked for it. While they might be very good at executing the business model, they come back and ask how they can improve upon that growth with marketing efforts, such as direct mail. So now we not only help them open branches, but also help them sustain that growth."
In 2003 the bank services subsidiary started managing in-store branches for banks, beginning with its largest client, Charter One Financial Corp. The Cleveland company has been adding in-store branches rapidly over the past year, and they now account for more than one-quarter of its 600 branches.
National Commerce Bank Services also helps banks recruit, test, and train employees for store branches, and it can help banks develop strategies and products for the Hispanic market. For that it draws on its 2003 acquisition of a stake in El Banco de Nuestra Communidad of Atlanta.
The $23 billion-asset parent company's president and chief executive, William R. Reed Jr., has been divesting slow-growth branches and poorly performing businesses. The divestitures included last September's sale of its merchant-processing subsidiary to U.S. Bancorp Inc.'s Nova Information Systems.
As it scales back in some areas, National Commerce is reinvesting in markets and businesses with brighter prospects, such as consulting.
"The whole financial enterprises area is small in absolute dollars but big on growth," said Kevin Fitzsimmons, an analyst who follows National Commerce for Sandler O'Neill & Partners LP in New York. "So over time you might expect those businesses to become a bigger part of the company."
A spokeswoman said National Commerce Bank Services contributes less than 5% of the company's profit. In all its nonbank businesses earned $52 million in 2003, or 17% of National Commerce's profit. Nonbanking businesses made up a larger percentage of National Commerce's profits before its 2000 purchase of CCB Financial.
National Commerce pioneered in-store branching in the 1980s, and now has about one-third of its 500 branches in grocery and department stores, including about 20 in Georgia and Tennessee that are run by Wal-Mart Stores Inc. Since starting the consulting business in 1987 it has advised more than 300 other banks on in-store strategies in addition to working with major retailers that host branches.
