Academic journal article ABA Banking Journal

Will Any Road Do?

Academic journal article ABA Banking Journal

Will Any Road Do?

Article excerpt

Every two years for the pas decade or so, the officers the American Bankers Association have temporarily put aside legislative and regulatory matters to spend a few days looking at the broader issues of where the banking industry is heading, and what ABA's role should be in helping bankers get there.

Or as the Cheshire cat told Alice, if you don't know where you're going, then any road will do.

Three critical issues face the ABA. They're not the only three issues on our plate, by any means, but they represent the issues that ABA should focus on right now.

The first critical issue is the modernization of the association's array of products and services. Just as banks seek to offer their customers the latest in financial services, the ABA must continue to develop products that meet modern banking needs and the vehicles to help deliver them.

In other words, the ABA must build a world-class reputation as a business organization. That means paying close attention to the needs of the banking marketplace and developing highly effective business processes for bankers. The goals are to bring new products to market faster and to exceed financial targets. It is a full agenda that, if accomplished, will help ABA achieve its financial ambition of substantially increasing non-dues revenue over the next three-to-five years. This is an important goal of keeping ABA on sure financial footing while, at the same time, reducing the reliance on members' dues to support association activities.

Which brings me to the ongoing trend of mergers and acquisitions in our industry. It is this trend that creates the second critical issue facing the ABA, and every bank trade association, right now.

You've seen the numbers. In 1980, there were 14,434 banks, according tothe FDIC. By the end of last year, there were 9,143 banks, and that was down from the year-end 1996 figure of 9,528.

The immediate impact of this change on a trade association can be significant if the trade association hasn't planned for the inevitable loss of dues income. We've seen dues decline at ABA because of bank mergers. It's a reality of the 1990s. But thanks to advance planning and careful shepherding of the association's financial resources, the ABA has successfully weathered the trend. Our commitment to you is make sure we continue to do well in the future, even though we know that the pressure of declining dues income will continue. …

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