BANKING SPECIAL MUTUAL DEPENDENCY
Christian Mol
Pull beats push
36 ISSUE 23 MAY 2010 Rl WORLD
million," Saris says. "Each team consists of relationship managers and
specialists for loans, international finance, treasury, fïnancial logistics,
corporate finance, public sector and corporate insurance.
All our regional teams support local banks to serve their customers,
with customer ownership remaining at the member bank, not at
Rl. Our current challenge is to enhance the skills at the local level.
There are thousands of colleagues at the member banks who can
potentially be trained in corporate banking, which will strengthen
our position in that market."
Saris mentions recent market research that supports the importance
of close proximity. "Local representation is key to our strategy,
simply because the market appreciates our presence. It is a unique
selling point, especially since competitors are retreating and
restructuring and they can hardly copy this. ABN AMRO is losing
ground, for example. They had 60 percent market share ten years
ago, but now that is almost halved. ING is eager to gain market
share by sharp pricing and short response times. Those are not
our strong points. Rabobank could be faster. We need to improve
on that, because we are in the race for market leadership in the
mid-corporate segment by 2013. We have two to three years left
to improve our market share to 35 percent, leaving some distance
between ourselves and number two. Our strategy of close proximity,
high quality of products and service and a focus on long-standing
relationships will bring us there."
Another domain where Rabobank International is helping the
member banks of Rabobank Netherlands to gain ground is that of
private banking. "Private banking at Rabobank is a rather unique
activity", explains director Pim Mol. "In the market we distinguish
between the typical investment banks such as Goldman Sachs,
the Swiss private banking model that Sarasin represents and the
universal model that is applied by general banks such as ABN AMRO.
But at Rabobank we use a cooperative model in which member
banks play a key role. In a lot of universal banks the head office is the
determinating factor; at Rabobank Netherlands the local banks are in
charge. Our member banks are in close proximity to their customers,
and they cater for different needs and offer private banking services
to clients that are looking for investment advice, wealth structuring
or charity management."
Local banks by themselves cannot compete with huge institutions,
and that is why the supporting departments are grouped together,
according to Mol. "Last year we pooled the researchers of Robeco,
Schretlen Co and Rabobank Private Banking into one investment
competence centre. The advantage of this setup is that the
connections with local banks are less fragmented. In the past,
different product developing units at Rabobank would have their
own marketing responsibility, approaching local banks themselves.
Now everything is channelled via us."
For product development, Rabobank Private Banking calls upon
Rl, but Mol's competence centre remains in charge. "We do not
want the product development teams at Rl bypassing us, because
that has created a lot of problems in the past. They would push
their products into the market and we would have to deal with
the customer feedback, good and bad. Sometimes even a perfect
product simply doesn't match with an individua) client's needs. In
the new setup, our whole approach is more customer oriented and
less product focused. Pull has replaced push. We are taking that
model one step further in the not too distant future, by switching
from product related income to some sort of advisory fee. That will
enable us to improve the transparency for our customers."
The current strategy of Rabobank Private Banking was developed
a few years ago, explains Mol. "We noticed that a product focus
was not beneficial to our customers. Each customer has specific
wants and needs that are best addressed by private bankers at the
local bank. Some clients focus on capital protection, while others
are keen on capital growth. The need for personal service was
even stronger after we went from a boom cycle into an economie
downfall. You can imagine that clients want solid advice when
markets are moving downwards. Understanding the needs of clients
