Internationalization:
one of the policy themes
of the nineties
Babo
band Issue 6/April 6, 1990
Banking markets are on the move everywhere. The Rabobank Group
is following these movements closely. The nineties have started.
What can we expect? We talked about this with Herman Wijffels,
Chairman of the Executive Board. 'Financial markets are
characterized by tremendous changes and Rabobank is bursting
with eagerness to tie in with these. An eagerness, incidentally,
which as befits a good bank is based on soundness and reliability.'
Everywhere in the world there is fair-
ly stable economie growth. Wijffels:
'I expect this development to con
tinue in the coming years. It is accompanied
by uncertainty in the financial markets,
however. Money and capital markets have
largely become divorced from the real econ
omie developments and are behaving nerv-
ousiy. That again became clear in October
last year with the so-called mini-crash on
the stock exchanges. Financial markets
have become a potential threat to stable
economie development. Another important
economie trend is the internationalization
of the banking business.'
Many cash dispensers Technology has
become increasingly important for the func-
tioning of a bank. 'Micro-electronics has
become indispensable in our business,'
says Wijffels. 'After back-office automation
had begun, technology also became a fac
tor that determines the image of the bank
hall. in the Netheriands, for example, Rabo
bank has about 900 cash dispensers. That
is more than all the other Dutch banks put
together. In addition, information technol
ogy is playing a rapidly growing role in the
distribution of bank services - just think of
telebanking. Customer information sys-
tems and expert systems are becoming
available, permitting a higher service ievel
and better advice to customers.'
Society is changing Wijffels: 'We no-
tice great changes taking place in society
too. Think of individualization, the higher
educational Ievel of our customers, the in-
creasing social and political maturity and
higher quality requirements. These have con-
sequences for the way in which customers
wantto be served. Another important devel
opment is that society is looking increas
ingly critically at the effects of the way com-
panies behave. Environmentally friendly ag-
ricultural production, campaigns such as
'pure coffee', 'pure textiies' and 'pure
banking' and the rapidly increasing popular-
ity of the colour green in all kinds of products
show that markets in many countries are
becoming more and more receptive to con-
siderations of this kind.' These devel-
op ments in society are leading to greater
differences in the bank's clientèle. Wijffels:
'The key word is quality. Quaiity tailored to
the individual customer's pattern of expec-
tations.'
Rabobank's position How does Rabo
bank intend to position itself in these de
velopments? 'Our present position is char
acterized by large market shares in the
most important domestic market segments
such as lending, saving, payment transac-
tions, insurance and travel,' says Wijffels.
'In addition, our local banks are strongly in-
volved with customers in their own field of
operations. On the basis of this strong
starting position, we have determined the
strategy for the nineties together in the
past few years. Confirming and strengthen-
ing our identity is a central aim. From that
basis, maximum attention is being paid to
innovation and specifically targeted inter
nationalization.'
Identity In the sixties and seventies,
Rabobank expanded into the bank for every-
one, particularly also for private individ-
uals. Wijffels: 'In that period, the core ob-
jective of our cooperative disappeared
from the picture to some extent. People
knew, of course, that
there was something
cooperative about us,
but it wasn't very clear
what that was. This pic
ture, and the realization
that our environment is
subject to rapid changes,
led us to reflect on our
identity. Who are we,
who do we want to be?
These are central ques-
tions in this respect.
Serving the economie in-
terests of our 400,000
member companies at
home and abroad is the
most important reason
for our existence. In con
crete terms, this means
that we endeavour to
finance companies on the
most favourable terms. In
line with that, we are
striving to be a first-class
bank for ali our Dutch
members and customers
- in other words, both
companies and private in
dividuals. We must give
high priority to maintain-
ing and strengthening our
position in the home mar
ket.'
Innovation 'If we aim to respond effec-
tively to a changing environment, then in
novation is a precondition. Innovation
does not only involve introducing new prod
ucts and services. In this respect, I am also
thinking of new forms of distribution, new
internal organizational structures, new pro
cessing systems and so on. In short, our
organization must constantly renew and
adapt itself on all fronts. In recent years,
we have put more than twenty new or re-
newed products and services on the mar
ket annually.'
Internationalization Another policy
theme for the nineties is internationaliz
ation. Wijffels: 'Internationalization based
on the primary objective of being of ser
vice to our Dutch members and customers.
The international expansion of Rabobank
is therefore closely bound up with the
strongly increasing international trading
relations of Dutch businessmen. Many of
these people are our members and they
want us to help them beyond our national
frontiers too. In practice, this means we
are particularly present in those countries
with which intensive trading relationships
exist. In addition to this objective, our in
ternational expansion fulfils two other
aims. The first is to attract funds on the
international money and capital markets
in order to acquire funding for our roie as
a lender. In view of our internationally
highly regarded solidity, we can acquire
these resources at a relatively attractive
price. This price advantage is ultimately
reflected in the interest rate we have to
charge our members. A second additional
objective of our international business is
our specialization as a global agribusi-
ness bank. This explains our presence
outside Europe as well.'
Employees 'Despite all technological
developments, banking still remains a human
Wijffels: 'Internationalization based on the primary objective of being
of service to our Dutch members and customers.