Outlook: Banking: Banking changes...but much remains the same

When asked to think about the future, I usually revisit the past before sticking out my neck.

Few industries have endured as much change in the past decade as banking. First of all, as an industry we don't exist anymore!

Large, small or in between, we are all now part of the financial services industry, a 21st century rubric of specialists who want to help you with your money. We all have the potential to provide businesses or consumers a full range of products and services, including brokerage, insurance, trust, asset management, merchant banking, consulting, dog biscuits, Internet oh yes, loans and savings accounts as well.

Mega-banks can deliver it all through large networks of regional centers and 800 numbers. Community banks have to focus more on niches and depend on personal service, quick decisions, entrepreneurship, and commitment to community to succeed. There is need and demand for both, if each does its job well.

Ironically, despite national industry consolidation, there are roughly the same number of banks in Springfield today as five or six years ago. In fact, I know of no community our size which has birthed as many de novo banks the past three years as Springfield has.

Why have things changed so much ... and so little? Why have we said good-bye to Boatmen's, Mercantile, First City National, and hello to Old Missouri, Village, Signature, and The Bank, as well as Bank of America and Firstar, national chains that have acquired the familiar old names?

To me, the answer to this one is simple: because we are all market driven. We live, work and lend in a dynamic, expanding market that is fiercely independent in exercising its power of choice. If a business or individual doesn't like how they are perceived or treated, they will go elsewhere.

So, as the names and products change, what our customers demand doesn't. They want service, service, service! And we either figure out how to provide it, or we get exchanged for another bank.

So what does all this have to do with the future? I don't have a clue what will happen in 2001, and I doubt that many of us "financial servicers" do. We know what we hope will happen, but when we talk in small groups it is about the boom-market mentality that seems to prevail throughout our region.

Most of us have been through recessions, overbuilding and problem loans. We acknowledge that no community or region is bullet-proof, and that old banker inside us is wary at heart not just for our sake, but for our customers and community, as well.

This cautious core will probably, and hopefully, translate into tighter underwriting standards as we enter a period of economic uncertainty.

Strong borrowers will understand, weak ones will complain. Our regulators are reinforcing this message. To quote Donna Tanoue, chair of the FDIC, "It's a time for caution. It's a time for proceeding with care."

I do know that to succeed and survive in 2001, financial institutions need to listen to and think like our most entrepreneurial customers, and adapt quickly and efficiently to market conditions. At the same time, we need to honor the old saw service, service, service! Hence our challenge as institutions and as an industry: to change ... and to remain the same.

(Todd Parnell is president of The Bank.)