Overheard...At BAI's Security/Compliance/ Audit Conference

General Session speaker William Isaac, Chief Executive Officer & Managing Director, Secura Group, Washington, D.C...."Banks should not try to be the K-Mart of the financial industry. With the cost of branches and the 10 million plus in regulatory compliance burden and costs, they should not try to cut cost to become competitive in a market where they cannot win. The same rule holds true with technology. Banks will never achieve the capabilities of the telephone and cable companies and the computer industry.

"Banks give the added value of delivering quality services, which make them worth what they are to their customers. Only offer your customer the best, and maintain strong balances. Lending and servicing the small and medium size businesses is a market that still belongs almost exclusively to the banks. If you stick by these customers, they will not forget you. If you ignore them and they leave you, they will never return. Their business leads to 401Ks, pension accounts, trust business, mortgages and beyond. Don't get so focused on costs that you lose sight of your goals."

In addressing the problem of regulatory burden, Bill Isaac said, "The problem of regulatory burden relief is off to a good start, but there will never be enough. I can't think of anything in FDICIA that we couldn't live without! And I think there ought to be a law passed that no regulator can use more than 26 letters for their regulations. That way they would at least have to get rid of one before they could hit us with an AA, BB, CC and DD!"

On Customer Service...in another session: "We had to set goals in order to improve performance. Our customer service people were taking 350 calls a day, and had a 35% abandonment level. First we tied increases in, percentage wise, to that abandonment level. Then, through training, employee involvement, and better managing, three months later we had it down to 5%. Last week, for the first time, we had a "0" day, and everyone celebrated. Everyone felt responsible-which they were."

On Stress Levels...in a March 16 American Banker interview of Phil Gay, Sr. Vice President & Compliance Director, Bank of North America (and advisor to the HOTLINE), Phil said, "Compliance officers get more respect now, because the consequences of noncompliance are more severe. There are simply more rules to get wrong. The title of compliance officer may be obsolete within a few years. 'Risk Management Officer' might be more appropriate."

Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 7, 3/95