Magazine article American Banker

AMEX Is Applying Lessons Learned from MBNA Link

Magazine article American Banker

AMEX Is Applying Lessons Learned from MBNA Link

Article excerpt

American Express Co. has refined its approach to partnerships with card-issuing banks after hiccups in its arrangement with MBNA Corp., a UBS Securities LLC analyst said.

After meeting this week with Gary Crittenden, Amex's chief financial officer, Eric E. Wasserstrom wrote in a research note issued Wednesday that the executive "indicated that there were some unexpected challenges that arose with the MBNA relationship which impacted its initial performance."

In the meeting (which Amex confirmed took place), Mr. Crittenden "suggested" that the difficulty arose with MBNA's operational managers -- not its top executives -- in implementing the coissuing program, the note said.

Amex has incorporated "lessons" from its partnership with MBNA "into its pitch to -- and integration efforts with -- newer bank partners," Mr. Wasserstrom wrote.

The New York firm has learned to educate bank managers focused on the return on receivables to think more in terms of Amex's orientation toward spending rather than lending, the note said.

"For example, it now has an account plan for each partner that specifies which of its partner's accounts it is targeting for conversion to an Amex product and demonstrates how that conversion is yielding returns for the partner," the note said. "These are tools it did not have when it signed MBNA."

Because Amex has adjusted its methods, Mr. Wasserstrom wrote, it would take longer to roll out products with new partners. …

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