Tuesday, November 12, 2013

BofA growth starts with one more product per (wealthy) customer

Revenue growth has been tough for banks of all sizes since the financial crisis. But Bank of America CEO Brian Moynihan says getting that growth starts simply: with selling one more product to the millions of customers Bank of America already has. Especially the wealthy ones.

The strategy, known in the industry as cross-selling, has been in vogue of late and is most commonly associated with Wells Fargo. But it's also been a theme at Bank of America as it's absorbed investment bank Merrill Lynch. Now Moynihan says it's a priority across the bank: retail, wealth management, commercial, business, investment banking and markets.

"It's always about basically focusing on the customer and getting another piece of business from them," he said.

Moynihan said a special emphasis has been on wealthy customers. Of the 8 million visits per day Bank of America branches get, about 1 million of those are from the affluent.

"You're working them and working them and that's where the growth's going to come from," he said.

Moynihan made those remarks as he opened up his bank's financial services conference in New York with a 45-minute wide-ranging discussion on everything from consumer spending to the future of bank branches. Here are a few more key things he said:

  • Corporate America is generally more optimistic, and cash flow is strong. Executives are still a little uneasy, however, about future economic growth.
  • Consumers are spending "at a fairly good clip." 
  • Bank of America is bringing in wealth management advisers at a steady rate. Much of that is coming from what's called its "PMD" program, a three-year training progression.
  • The bank has spent about $750 million on mobile development over the past few years. That's paid off with about 6,000 to 7,000 new mobile banking customers per day. About 7 percent of checks Bank of America deposits are now coming through the mobile app.
  • Branches on the whole are getting larger. In Boston, for example, Bank of America has taken four regular branches within a few blocks of each other and combined them into one larger branch with more people of different specialties. 
  • However, the bank is also experimenting with "Express" branches, which are smaller and rely heavily on video technology.

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