Magazine article American Banker

Royal Bank of Canada Topples Walls to Boost Customer Profitability

Magazine article American Banker

Royal Bank of Canada Topples Walls to Boost Customer Profitability

Article excerpt

Royal Bank of Canada has put organizational muscle behind an effort to focus employees on customers, not products.

A reorganization completed late last year has broken down barriers between the retail bank's personal and commercial banking divisions and eliminated redundancies, said James T. Rager, vice chairman of Toronto-based Royal Bank.

Besides saving money, he said, the revamp has increased collaboration among marketers, salespeople, and product managers.

Before, "everyone had the spirit, but the organization got in the way," Mr. Rager said.

The handling of people who own small farms illustrates the benefits, he said. These are unprofitable customers for the commercial banking division, whose employees would probably would suggest lower-cost delivery channels, Mr. Rager said. But many small farms are owned by wealthy people who run them as hobbies -- attractive prospects to a retail banker.

With the reorganization, retail and commercial bankers now work together on strategies for improving the customers' profitability, Mr. Rager said.

"A lot of business banking customers are potential retail customers," he said in an interview last week after a speech at an American Banker conference in Phoenix on retail delivery.

Product managers have been most affected by the realignment, Mr. Rager said. They must cooperate with salespeople and marketers to ensure that consumers get only appropriate product offers.

"It's a collaborative approach that's working," Mr. …

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