Magazine article American Banker

Want to Be a Bank CEO? It Might Help to Work at McDonald's First

Magazine article American Banker

Want to Be a Bank CEO? It Might Help to Work at McDonald's First

Article excerpt

Imagine selling financial services as you would shoes, cigarettes, fast food, or any other consumer commodity. As unlikely as this may sound, it's becoming a reality.

Banks are beginning to adopt a retailing approach to the sale of financial services. But are bankers retailers? And if so, what does that imply?

To my way of thinking, retailing encompasses distributing, merchandising, and, ultimately, selling to the public at point of sale. Given their presence in branches, ATMs, and supermarkets, banks can indeed be defined as retailers.

Of course, such point-of-sale marketing activities are only one aspect of the bank's operations. What's more, retailing is only one element in the marketing mix.

This being the case, should bank CEOs view themselves as retailers when it comes to consumer businesses?

I think not. In fact, bankers are marketers first and foremost - and retailers second.

Consider all the nontraditional ways financial services are reaching consumers: PCs, the Internet, the telephone.

These services may not fit the traditional definition of retailing, but they can be classified as marketing.

Such distinctions aside, why should bank CEOs be concerned with either retailing or marketing?

Because they cannot afford not to be. These are the very functions responsible for building revenues, market share, and profits. To relegate them to middle management would be an abrogation of a CEO's strategic management responsibilities.

There is ample precedent for CEOs to expand their focus in this way.

For example, there was a time when few of the understood bank operations and systems. …

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