Banking's Future: 'It's All About Trust'BAI Roundtable: CEOs Stress Need for Banking Basics, Customer Service
This is the vision of banking's immediate future, as expressed by a pair of industry leaders at the BAI Retail Delivery Conference & Expo in Boston.
Appearing at a general session in a CEO Roundtable discussion, Richard Davis, CEO of U.S. Bancorp, and Bharat Masrani, CEO of TD Bank, agreed that the industry has taken an historic hit over the past year. But they also believe that banking has the opportunity to lead the way to recovery.
"Now, perhaps more than ever, we have the chance to make a difference," Davis said.
The session was moderated by Steve Bartlett, CEO of the Financial Services Roundtable. He set the stage by discussing the need for banking institutions to rebuild trust, not just with customers, but also with shareholders and legislators. "It's all about trust," Bartlett said.
Looking ahead, Bartlett said he foresees landmark regulatory legislation ("Think 1933," he said), and he called for a new focus on improving the public's financial literacy. "We want financial education taught in all schools from K-12," he said.
Davis said banks have to adopt some right-brain thinking to emerge stronger from the economic crisis. The key is to focus on basic banking, prepare for increased regulations and accept that there will continue to be bank failures as the industry adjusts.
"We need to focus on the things that work," Davis said. "Banks will be the catalyst for recovery."
Masrani stressed the need for banking leaders to focus on customer service. "It's critical for bankers to be out in their communities," he said.
He also emphasized the need for institutions to invest in mobile banking and other new services that customers demand. "Customers will vote with their feet - and deposits," he added. "They expect and demand products and services anywhere they want them."
Responding to a question from the audience about how the industry will look in 10 years, Davis said "A lot like it looks today," adding "The lessons learned in the last year will last well beyond 10 years."
"Banks are going to go back to being boring," said Masrani. "Whenever we've tried to tinker [with basic banking], that's when the troubles starts."
Asked about the immediate risks facing the industry, both men cited their concerns about regulatory reform. "We're making regulatory decisions we'll have to live with for a generation," Davis said.
On improving customer service, Masrani stressed the need to provide customers with "unparalleled convenience."
There is no secret to customer service, he said. "Banking is all about being local and looking after your customers one at a time."