The market conditions and thinking that brought us "alternative products" have opened eyes to possibilities for the banking industry.

But to realize its potential to serve all of a customer's financial needs, the bank of the future must focus on the totality of its customers' financial needs, instead of viewing investment products as "alternatives" to bank products.

It was in 1990 that the alternative product thinking took hold. The demand for bank investment products increased as income from certificates of deposit and savings accounts decreased.

Along came the bank investment representative with alternatives that customers had never thought about or had assumed they were not wealthy enough to consider. The squeeze on yields opened a door to fluctuating- value investments for a broad segment of the population that had little or no exposure to them before.

Even those who were frequenters of the investment superhighway began to see the bank as a place to discuss their investment needs. This was the first strong indication that the bank of the future would take a greater role in its customers' finances.

Unfortunately, the low interest rate environment that created this enormous window of opportunity in 1992 and 1993 has vanished, to the surprise of experienced bank investment representatives.

The interest rate shock of 1994 was so traumatic for many bank investment programs that at a recent Bank Securities Association mutual funds conference, the consensus seemed to be that business was off from 30% to 50%. It has forced everyone to examine what the representatives will be doing as CDs become more attractive and as some bank chief executives look to grow their deposit base again.

The bank investment business must reposition itself in the minds of bankers and customers if it is to prosper in the years ahead. The alternative product thinking must revert to what the retail investment business has always been about - helping people maximize their total return over the long term.

CDs, mutual funds and annuities, individual stocks, and bonds should be part of the investment mix of most of the bank's customers.

Banks must re-evaluate the role of their products in their customers' lives if they want them to look to banks for all of their financial needs. In this spirit, investment products should not be positioned as competing with bank products, but as complementing them.

I recently saw a good example of this while doing some on-site research. I was sitting with a bank investment representative confronted with a prospect who wanted higher returns, retirement planning, and funding for college education - but had little means to pay for those things.

The out-of-work father, now on disability, and the overworked mother had a small amount of cash available. It was their rainy day money, and in their situation, a rainy day could occur at any time. True to his calling and mission of serving the customer's best interest, the salesman sent the customer back to the banker to store the money in an insured product, which is precisely where it belonged.

That customer walking around the bank looking for the best place for his money was a sign of things to come. The traditional bank must move toward the "department store of finance" that my mentor, the late Harold Bache, foresaw over 30 years ago. We will miss the opportunity if each bank becomes more of a shopping mall, with different entities competing for the same money, causing people to lose the comfort they have always felt inside their branch.

While most bankers claim that they are relationship-driven and needs- driven, the product campaign of the month, the week, or the day so often drives activity.

Many bankers believe that the bank controls the customers' money. In reality, customers control their own money and with increased knowledge they will pursue their best options regardless of where it takes them.

Banks have a unique opportunity to leverage the comfort level and trust of their customer base, to ensure that their customers are able to pursue all of their best options inside the bank.

Trust, insurance, private banking, investment, and deposits are not alternatives to each other, except in a marginal way. The more bankers, trust officers, and bank investment representatives understand this, the more they will be able to grow their business to the benefit of all concerned and become a part of the bank of the future.

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