FutureBanker: When you were promoted to president and COO of Huntington Bank and vice chairman of Huntington Bancshares, why did you opt to have the direct bank and Huntington Web Bank report directly to you? Geier: I look at (electronic delivery) as an electronic region. People walk through the Internet door the same as they walk through a door of the branch, so they're a part of the distribution system. And my basic role is driving the sales and the revenue for the distribution system. I consider myself the chief sales manager for the company. We have regional presidents for our various banking regions that report to me. And then we have obviously a head of our Huntington Web Bank, a fellow by the name of Chet Thompson, who just joined us from CompuServe. I consider him the regional president for the Internet. FB: What are the advantages and challenges in organizing the company that way? Geier: The biggest advantage is obviously having all of the customer touch points working together and viewing the company holistically as opposed to just geographically. Looking at the company and running basically the stores on an integrated basis. When I use the word store I mean the branch but I also mean the telephone in everybody's home that comes into Huntington Direct and a PC that comes in through the Huntington Web Bank. We're kidding ourselves if we think the customers aren't multiple channel users. When someone comes into the Internet bank, they want the same type of buying experience, product array, look, brand that you would have in a Huntington branch. And that's one of the real advantages of (integrating channels). The challenge to it, which is part of the advantage, is really listening to the customer as far as what they're doing and what they want. FB: What do banks have to gain or lose on the Internet? Geier: On-line banking, if you do it right, gives you a couple of real advantages. One is immediate interaction with the customer; it's real time and you can get things out to the customer very quickly in terms of new product offerings. The other issue for banks is what happens to your brand on the Internet? Does it get diluted or do you strengthen it? FB: How do banks avoid being just another Web page out there? Geier: One, you have to have good functionality. In other words, you have to be able to do lots of banking and financial services transactions. Second is good target marketing.Capture the mindshare and the customer base and market share early (and) distinguish yourself with content and with the delivery. (Internet banking's) not a clunky thing; it's interactive; it's cool. And a lot of banks aren't cool-let's face it they're not. It's a different medium and I think the banks that recognize that it is a different medium and market it differently to make the Web site cool will certainly heighten their probability of being a success. FB: Is it important for regional banks to build a powerful electronic presence to compete against larger, more national, institutions? Geier: The Internet is a great leveler when it comes to size. When you're on the Internet, or on-line, your reach is the same. Huntington can go anywhere that anyone else can because you are not limited by the physical location. It comes down to functionality, capability, marketing and picking up customers ultimately. FB: What becomes of the branch? Geier: The branch becomes a store, it's really retail space. The look of the branch and what's happening in the branch is changing dramatically-has changed-so configurations will be different. In our case, we look at sales per full-time employee, per day; we benchmark them that way; we evaluate them that way; we train them way; we incent them that way. FB: How do you treat the branch as retail space? Geier: You've got to look at your branch and merchandise it the way a Macy's or Bloomingdales does. You've got to look at it as retail space. What does the customer see when they come in; what experience do they have; how are you going to keep them; how's your traffic outline in the branch? A lot of the branches you go in, my God, they've got the same posters they had up two years ago. In our offices they rotate through and there's new signage for product offerings every 90 days because after a while (customers) don't look at it. That's the idea of looking at (branches) like stores, keeping them fresh and consistent same look, same branding. FB: You mentioned earlier the need for integration. What are Huntington's integration goals? Geier: That's a big question. I look at the integration more as integrating the delivery system. We've done that a number of ways. Let's (look at) telephone delivery. Right now, at all of our supermarket offices, all the customer service that you typically have in a branch is handled by the telephone. That's one way you integrate the delivery channels together. You take the high-volume, very necessary customer service, and you lift that out of the branch with your direct bank in a number ways. You market it. You sell it: "If you don't want to wait in line, call this number." We have about 20 to 25 percent of our offices that are actually answered by Huntington Direct. Now they tend to be routine customer service. But in the (branches), the sales are expected to rise so that they're able to deal with the face to face selling that still does and can occur in the banking offices. I think a lot of banks are missing a lot of tremendous opportunities by not picking off the low-hanging fruit that's come in the door. Nonbank competitors would kill to have the kind of traffic we have in branches. FB: Don't you want to keep the transactional customers from coming into your branches? Geier: I'm not so sure you can keep them, and I'm not sure you want to keep them from coming in. Just because someone is high-transaction doesn't mean they can't be cross-sold or up-sold or they aren't the highly profitable customer of tomorrow. People are always asking, "Gosh, how can you get people out of the branches? Let's charge them to go there." I say, what would a retailer say? If you had a Merrill Lynch broker and said, "You can sit here at your desk and have 500 people walk by every day, what do you think?" And that's somewhat the mindset that we're changing to in the banking offices. FB: Don't you have customers coming into the branches to cash checks that generally just aren't profitable? Geier: Value eaters? Oh sure. You have to either up-sell them or obviously put them in the right product set so that you're getting compensated. A lot of that you can do by looking at their transaction patterns, the kind of banking they do and shopping. I'll give you a perfect account; it's called our access account. It is really our largest. It has been for the last year (the bank's) fastest growing checking account product set. It's about a third of all our DDAs now. And it basically is nothing more than an account for people who don't go into the branch a lot but use the telephone, the ATM. And there are people who shop that way. They tend to be a little bit younger, maybe not quite as high balance, but loyal customers and good customers for cross selling. That's an example of an account that not only picked up a tremendous amount of new customers but saw customers migrate to it. FB: In terms of Internet marketing, TicketMaster's current suit against Microsoft raises interesting questions for banks. Should banks link to financial information provider sites like Investor's Edge or Microsoft Investor? Geier: You've got to make a fundamental decision, and I'll tell you the one we've made. When the customer walks into your electronic store, what do they see over the door? Do they see the Huntington Bank, or do they see something else? If you are (one of) 10 different banks on the shelf, so to speak, of a financial (information) provider, the same analogy for a physical location is a customer is walking in the door of a company and looking at 10 different checking accounts on the wall. You're commoditized. In my mind you've lost value in your enterprise. I see dangers in that. ...But if you're looking at purely transactions. Let's say if (banks) just want to do volume transactions, that's probably not a bad strategy. If you want value-added long term relationships, I think you've got to question that (strategy). FB: And if a bank chooses to hot link, where should the connection be made? Geier: I want them walking through the front door, because I think when they just hot link to a page (within the site), you run the danger, because you're hot linked, you're a commodity then. FB: And you don't think banking products, particularly mortgages, are already commoditized? Geier: I think the products are. You run into the danger of the relationship being commoditized when you make that decision (to hot link), as a bank. You're doing two things: You're putting your brand in danger on the Web, and you're further commoditizing yourself. I think banks may be giving up on that one too quickly. -bers tfn.com

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