Bank of America: Aiming Higher

By Mel Duvall  |  Posted 2004-11-01 Print this article Print

Bank of America spent $47 billion to acquire FleetBoston to get a stout presence in New England and New York. The bank will spend tens of millions to convert its 1,500 branches onto its Model Bank platform, so it can provide the same services nationwide.

Bank of America wants to be the first national retail bank. That's why it spent $47 billion to acquire FleetBoston, giving it a stout presence in New England and New York. It also will spend tens of millions to convert fleet's 1,500 branches to its Model Bank platform. But such conversions haven't gone that well in the past. If a customer gets different service in California, Florida and New York, is this really a bank of all America?

Amid the neon lights and chaotic crowds of Times Square, Bank of America is creating a little razzle-dazzle of its own. At a new branch located directly below MTV Networks' studios, a 50-foot-wide, 3-foot-high electronic billboard works around the clock emitting marketing slogans such as: "Bank of America: Higher Standards," "A Higher Standard of Banking" and, in case you missed the point, "Higher Standards—Even by New York Standards."

Bank of America, which has a century of history stretching from San Francisco to Charlotte, N.C., is promising its customers a new way to bank. Its refresh comes in the wake of its 2003 takeover of FleetBoston, the largest consumer and commercial banking operation in New England. The $47 billion deal included Fleet's N.Y. branches, which finally give Bank of America the chance to make its debut on Broadway, as well as in the rest of the affluent and densely populated Northeast.

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Visitors who stroll into the red, white and blue lobby of the bank's midtown Manhattan branch are not disappointed. They are greeted by a concierge, who quickly directs them to a service of their choice. Need to look up stock prices or check your bank balance? Walk up to one of three Internet kiosks stationed in front of the floor-to-ceiling video screens, which display a vertical stream of stock symbols and share prices.

Need access to your safety deposit box? Enter your box number on the security pad, let it read your palm and walk on into the vault. You don't need a teller to lead the way.

In fact, you're not likely even to spot a teller, at least from the street. Six teller windows–with Bank of America employees behind them–are located at the back of the branch, hidden from view. You get a sense of the pecking order when you walk past a row of seven automated teller machines, and then a series of investment and mortgage advisers, before encountering anyone you can speak to about a simple deposit.

"It's just like going into a grocery store. You have to walk past the canned goods, the meat, and the fruits and vegetables to get your bread and milk," says Alison Rourke, Bank of America's senior vice president of retail distribution, who is rolling out the bank's services and technologies in New York and elsewhere along the East Coast.

On the surface, Bank of America looks well prepared for its arrival on the Great White Way. The bank has already converted branches in many Northeastern states to its signage and colors. Before the first Fleet branch got its initial dose of "higher standards,'' the takeover target's customers were able to make withdrawals at any Bank of America ATM across the country without incurring extra fees. And monthly statements with both the Bank of America and Fleet logos began arriving in the mail this summer.

But behind the scenes, Bank of America's work has barely begun.

For now, information systems remain disconnected. Tellers working on screens and keyboards that customers never see must toggle between two different "core" banking systems, depending on whether they are trying to serve Fleet or Bank of America customers. Meanwhile, conversion of Fleet accounts to Bank of America's highly touted Model Bank computer systems isn't scheduled to be completed until the middle of next year.

Converting all its branches to the Model Bank platform is central to Bank of America's ambition to be the first truly national for-profit bank. With Model Bank, tellers or branch managers in any region of the country will be able to see what deposits the customer has, anywhere in the bank's network; what loans, securities and other assets the customer holds; and what kind of activity has taken place recently, from swiping a check card at a local store to taking out a home mortgage.

Yet even when Fleet's systems are converted, Bank of America still will be operating on two different banking systems. While the Model Bank platform serves most of the country, a separate set of computer systems for tracking accounts and activity will still be in place for California, where Bank of America began in 1904.

Failure to fully integrate computer systems will leave gaping holes in its ability to provide seamless services from coast-to-coast, or set "higher standards" in banking. Yet nearly 1,000 of Bank of America's 5,800 branches are outside the loop in California, with another 1,500 branches coming from Fleet scheduled to be converted to the core banking system next year.

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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