With over 15 years' experience in managing retail-oriented companies, John R. Beran appears perfectly suited for the job that Comerica Inc. has handed him.
The Detroit-based banking company, having absorbed the former Manufacturers National Corp., is looking to expand its retail banking horizons. Mr. Beran, the $35 billion-asset institution's first chief information officer, is expected to manage the infrastructure that will make that possible.
As the former president and chief executive officer of Money Access Service Inc., Mr. Beran knows about the retail systems and alternative delivery channels on which Comerica plans to base its consumer banking push. Money Access, based in Wilmington, Del., operates one of the nation's largest automated teller machine and point of sale networks.
Still, Mr. Beran faces a big challenge. Historically, Comerica has rooted itself in wholesale businesses. Its success there - it has risen in rank among commercial lenders for three straight years, to become the nation's 11th largest - has led to high expectations for the growth of the retail side.
"There's still a lot of hidden value in the franchise that can be released long-term," said Michael Moran, a banking analyst with Roney & Co.
Analysts say the bank has been performing well but now has an opportunity to use the strength of its commercial business to fund retail initiatives in the Midwest, Texas, and California.
Mr. Beran plans to uncover the bank's "hidden value" by expanding its range of delivery channels.
At the heart of Comerica's retail delivery strategy is "device independence," which entails giving customers a choice of channels, such as telephones or PCs, through which to access the bank.
"We believe very strongly that consumers will ultimately make the decision on the access device they wish to use to interface with Comerica," said Mr. Beran.
To determine the best balance of customer, product, and delivery channel, Comerica is building data warehouses and customer segmentation systems.
"We're trying to learn which customers use which products, and what the preferred distribution channels are to access those products," Mr. Beran said.
As part of this initiative, the bank is moving to a common data base environment, a major change in direction for Comerica. Mr. Beran explained that the bank always had data bases that were vertically integrated with the applications they supported.
Segmentation will give the bank the ability to design services specifically for the most profitable customers. The goal is to solidify relationships with these while learning to identify and attract new customers with similar profiles, he said.
In this regard, Comerica is in step with the rest of the industry, which has been steadily adopting the use of data warehousing to build customer profitability models that help differentiate services based on demographic and psychographic data.
Comerica also plans to bolster its alternative delivery strategy by enhancing distribution channels it has already begun developing, such as telephone and home banking, debit/point of sale, and supermarket branches.
Its telephone center, which handles four million calls annually, already gives customers access to account information and enables them to initiate applications for virtually all of the bank's services.
Comerica wants to take the same sales focus and extend it to the customer service area.
Now, customer service is organized around products. The bank wants to change this structure to focus on customers, so that customers can get information on their entire bank relationship through a single call.
In addition to telephone banking, Comerica is working to consolidate its home banking area.
Currently, the bank runs Comerinet, a PC-based home banking service. Started in 1989, the program is based on MasterCard's MasterBanking electronic banking program and Prodigy.
In addition, Comerica Bank-Texas has been working with International Transaction Partners - a joint venture of Electronic Data Systems Corp., US West, and France Telecom - on a PC- and screen-phone-based home banking pilot with Comerica employees.
The bank is in the process of evaluating both services to determine success levels, said Mr. Beran.
He added that ultimately the bank will settle on one PC-based home banking product to be deployed across all of Comerica's market. The bank should have a direction in this regard by mid-1996, he said.
Like other financial institutions, Comerica also has its eye on electronic commerce. The bank is developing a home page on the Internet, scheduled to go on-line this year. Initially, the service will be informational, establishing the bank's presence in cyberspace, but the bank would eventually like to expand to transactions, said Mr. Beran.
Servicing customers at the point of sale is another area Comerica is looking to expand.
The bank, which participates in a number of regional and national electronic banking networks, already has a strong program in terms of installation of point of sale terminals. However, it is attempting to expand this program by educating uninitiated merchants and customers on the use of debit cards as well as credit cards.
"Moving customers from the branch, as well as from checks to the point of sale results in a much lower-cost transaction," said Mr. Beran.
Despite the emphasis on electronic banking, Mr. Beran is quick to point out that branches will still play a key role within the delivery network.
"People think of alternate distribution systems. We want to focus on total distribution systems - alternate and branch together - how they will complement each other and how we will move customers between those alternatives," he said.
For Comerica, supermarket branches seem to provide the bridge between the convenience of an alternative delivery channel and the brick-and-mortar presence the bank plans to maintain and grow.
With 22 locations, the bank has the largest network of full-service supermarket branches, called Comerimarts, in Michigan.
At least two more are scheduled to open later this year, and four are pending with Comerica's acquisition of Houston-based QuestStar Bank.
Though distribution channels have been recognized as critical to Comerica's retail operations, Mr. Beran emphasized that the complementary mix of three key areas - customers, products, and delivery channels - are needed to achieve success.
"The strategy we put in place needs to balance and leverage all of these," he said.