As the banking industry undergoes rapid consolidation and the financial services industry as a whole begins to get an early read on the implications of sector convergence, senior financial executives of newly formed mega-institutions have their hands full developing marketing campaigns that clearly communicate the upside of these events to customers: expanded product offerings, distribution channels and service capabilities.

The average consumer only what knows what he or she reads in the newspapers, much of which is focused on the shareholder benefits of the acquisition or merger du jour being discussed.

In the old days (the last couple of years), putting a customer relations spin on things wasn't too bad as mergers were generally more straightforward: Chemical merged with Chase, NationsBank acquired Boatmen's Bancshares, Morgan Stanley merged with Dean Witter, Discover.

Today, it's a whole new ballgame. When a merger hits home now-and a big bank rolls into town after acquiring a local bank, which also happens to own an investment bank or brokerage firm-it's all customers can do to memorize the new name of the institution, let alone understand what it means to them.

Not surprisingly, this leaves many customers-overnight, the newly assigned customers of an unknown, huge institution-skeptical as to what it all means, financially speaking, to them? Is bigger necessarily better? And do I, as a customer, really want all of my business tied up with the likes of a Citigroup, which pairs Citicorp and Travelers, or BankAmerica Corp., the holding company for Bank of America and NationsBank, which also owns Montgomery Securities?

In this issue, we explore the challenges behind building sustainable brand identities in the days of mega-institutions (see "Building Tomorrow's Dynasty," p. 1) and how this affects an institution's ability to retain customers and maximize profitability.

Experts say it's vital for companies to communicate what the new organization represents, and that the larger entity won't result in declining customer service. It's also imperative that customers understand the new institution's expanded capabilities and what new products and services it offers.

But bigger can also mean less nimble, and niche financial players are quick to mount aggressive marketing campaigns emphasizing customer-focused businesses. This is when brand-and all that it represents-matters most.

- HOLLY SRAEEL

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