VISION 2005
Far-reaching effects
The big issues
Bert Mertens - discussing consequences for local banks
328 local banks. Restructuring
over the years has taught
Rabobank many lessons about
composing staff, products and
markets, and about the effects of
mergers on staff and the communi-
ty. But Mertens says redefining the
assistance that is needed or given in
the merger process is also currently
under discussion: 'Often, after
banks merge there is a dip in mar-
ket share. Rabobank Nederland, as
the service institute for the local
hanks, is trying to put together a
package of assistance so that
almost immediately after the merg
er the hank will see the value of it.'
Discussions along these lines have
commenced and are expected to he
complete by the time phase three -
implementation - begins.
A question you may be asking is
this: Does 'Vision 2005+' only
involve local banks? 'No, the prol
eet involves the whole organiza-
tion,' agree both Van Rijckevorsel
and Mertens. The role of
Rabobank Nederland in support of
the local banks is another aspect
under review. Says Mertens: 'We
are reasoning front the customers'
perspective what is required of a
local bank and we'U adjust the cen
tral organization based on that. I
expect that some supporting units
from Rabobank Nederland will
diminish but at the same time the
demand from local banks towards
Rabobank Nederland will be
greater and have a stronger
impact.' Van Rijckevorsel adds,
'More support and activity will
also be expected of other
Rabobank units such as Rabobank
International (RI). RI is expected to
continue to supply products for the
Dutch market and so must accom-
modate the formulas for product
range in each market segment.'
Thus, the changes underway are
likely to affect the entire organiza
tion, not just the local banks in
Holland. The Word and meeting
point will keep you informed of
further developments.
If you are interested to know more
about Rabobank 's co-operative
structure and membersbip, the
recently published English edition
of 'The bank with a difference' is
available now see our story on
page 25).
Q: When is a bank a bank
A: AU local banks agreed to offer a full range
of products to all clients except the top 2 to
3% of corporate clients. Tb is means
account management must be organized
and specialist staff are needed for insur-
anceinvestment, corporate lending and
treasury products). Tberefore, a certain
number of staff and a certain number of
clients are needed. This equates to a certain
ideal-sized bank.
Q.- Hou' can co-operative identity and values
be maintained
A: Rabobank 's co-operative identity has gone
from strength to strength over the years. If
local banks become too big tben tbey risk
the loyalty of members because increased
bureaucracy will result. However, too small
means a lesser scope of services available.
It ivas agreed that a balance is needed
between professionalism and size. In other
words, local banks need to be 'as small as
possible but as big as needed'.
Q: How can Rabobank serve the top 2 to 3%
of corporate clients (tbose with the bigbest
level of complexities) that some local
banks are not be equipped to serve
A: Discussion on tbis point is continuing.
Current thinking is that in order to keep
the bank close to the cliëntthe nearest
bank to offer the cliënt what tbey need will
be responsible. This is known as the 'sister
bankarrangement.
Q; How do you define local markets
A: It is necessary to organize market regions
so that each memher bank operates within
a defined territory. 100 years agothe
market was the parisb area. A lot has
changed in 100 years; these days 'catch-
ment' areas are defined in terms of socio-
economic factors and consumer behavior.
The current phase of'Vision 2005+' is
identifying and discussing these 'catch-
ment' areas. Borders will be redrawn, and
in generalthese areas will be larger than in
the past. Tbis is expected to be complete by
1 April 2004 and marks the heginning of
phase three in the project: implementation.
Q: What are the qualitative benebmarks for
local banks
A: Tbere are four criteria for success: no
'blank spots' in service; at least 30% mar
ket share; clear co-operative and commu-
nity values; operational and credit risks
under control.
6 I The Word I
