Academic journal article ABA Banking Journal

Synovus Builds a "New Bank" around Wealth Management

Academic journal article ABA Banking Journal

Synovus Builds a "New Bank" around Wealth Management

Article excerpt

That wealth management is red hot these days isn't exactly news. What's interesting to watch, though, is how thoroughly some banks are reinventing themselves to get the job done.

Case in point is Synovus Financial Corp. in Columbus, Ga. To give wealth management greater play, the bank holding company recently centralized some of its sales operations and reshuffled many of its incorporated businesses into new operational divisions under a new marketing umbrella.

Despite revisions, the organization remains decentralized, with 39 separate bank charters. Strong local branding dominating its strategy.

Synovus may be the first centralized/decentralized bank holding company ever to go after wealth management, but it's not getting hung up on paradox.

Instead, the company has opted to clean house and get the word out about its new priorities. Within wealth management, it has set out to improve the customer experience by more tightly aligning its trust, insurance, securities, and mortgage operations, says Walter M. "Sonny" Deriso, Jr., vice-chairman. "When we got involved in securities and insurance, we began to see areas of overlap in many of the business units," Deriso says. "We wanted to eliminate some of the administrative silos in commercial banking, securities, and trust, and coordinate our wealth management sales efforts."

While Synovus has long been active in providing the Southeast with trust services, it has probably been better known, overall, for its majority interest in TSYS, the payment processing and technology vendor also based in Columbus.

Still, the chairman's letter in this year's annual report indicates wealth management's increased importance in building a "new bank" that's really more about being a full-service financial services firm closer to Merrill Lynch than a traditional bank.

Jason Goldberg, a senior research analyst with Lehman Brothers in New York City, recently issued a report on Synovus and likes its newfound diversification. "For years they've really relied on a two-part approach--a strong credit card processing business and a strong commercial banking business," he says. "Now, though, they've not only put the third leg on the stool for even greater stability, they're going after a market that promises dramatic growth, potentially on par with the growth that the credit card processing piece of the business yields. It puts them in a very solid position."

The combined wealth management business generated $40 million in 2000, with a target of $84 million by 2003. Until now, Synovus has grown this part of its business by acquisition.

A new direction

The new wealth management marketing division is really more for internal reporting, managerial and sales purposes than it is an external marketing device, says Deriso. Still, the resulting "makeover" is just as thorough as any rebranding campaign.

As part of it, Family Asset Management has been spun out of Trust on its own. A Relationship Management division is comprised of Personal Trust, Private Banking and Brokerage; the Investment Management division includes Trust Investments, Canturbury Turst Company (institutional trust), Investment Banking and Retirement Plan Services; Insurance and Administration are two more divisions and the last is Strategic Support comprised of Marketing, Training, and Product development.

"We will use this new structure in our budgeting and goal setting," says Deriso. He says that, as part of the creation of a more team-oriented sales culture, Synovus will also change its incentives and reporting. Meeting at least monthly, sales people from various lines of business or functional specialties are cooperating with each other to bring about new, more coordinated objectives.

Even when it comes to the details of planning sales calls, Deriso says all sales specialists take a team approach to avoid the extremes of prospecting overkill or missed opportunities. …

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