William M. Fenimore is no psychologist, but after only five months with Meridian Bancorp, he has already begun to cure the bank's case of separation anxiety.
The $15.1 billion-asset bank self-diagnosed the ailment early last year: Technology was operating too independently from the bank's business units, and this isolation was leading to inefficient use of new technologies.
Taking its first step toward solving this problem, Meridian created the position of chief technology officer and promptly filled the spot with the 51-year-old Mr. Fenimore.
A 29-year veteran of CoreStates Financial Corp., Mr. Fenimore is recognized in the industry as a successful creator of fee-based businesses in areas such as cash management and check processing.
This experience explains his demonstrated ability to bridge the communications gap between business and technology managers at Meridian, bank officials said.
"We have to ensure that technology plays a role in the definition and plans generated to accomplish our goals," said Mr. Fenimore.
"Where we have business plans focused on accomplishing business objectives, we'll also have a technology plan that supports those objectives."
Carrying the title of head of strategic planning in addition to that of chief technologist, Mr. Fenimore said he believes Meridian is well on its way to making technology an integral part of its business strategy.
"Technology is playing a greater role in how we interface with our customers and how we successfully differentiate ourselves in the market," Mr. Fenimore said.
In recognizing the need for integration of technology and business objectives, Meridian is already ahead of many of its peers.
According to a 1994 study sponsored by the American Banker, Andersen Consulting, and the Tower Group - in which 150 of the top U.S. bank holding companies participated - over half of the respondents said they had no technology "vision," or sense of what role technology should play in supporting business objectives.
Most respondents also lacked long-term technology plans and said business managers and technology officers typically communicate poorly regarding technology investments.
The first way that Meridian hopes to avoid such problems is by including representatives of the technology group in its strategic decision-making.
Further, the bank plans to make technology a more integral part of its strategic direction by promoting an "intelligent use" of it throughout the organization, said Mr. Fenimore. This will entail training employees outside the technology area to look for opportunities for new applications, he said.
"There's so much going on that we have to be sure our users are made aware of what technology can do for them," said Mr. Fenimore.
Yet, even as it seeks to expand the role of technology, the bank will simultaneously reevaluate its investments in some areas.
Mr. Fenimore said Meridian will "spend judiciously in core competency areas," and "spend less on utilitarian functions that can be obtained from a provider," such as telecommunications and computer network management.
Though he declined to disclose the bank's annual technology expenditures, he said the budget is typically less than 10% of the bank's total operating expenses.
While a reduction in operating costs is one of the bank's primary goals, Mr. Fenimore said that Meridian is also "focused on a need to generate revenue."
Technology helps create revenue because it eases new product development. It also gives the bank the ability to identify and focus on the customers that bring the most value to the bank.
One technology the bank expects will help improve its profitability is "data warehousing," in which information from disparate application systems is drawn together into a centralized source of data for employees and customers.
Better management of information is a high priority for the financial industry, as it helps banks get a holistic view of customer relationships.
Armed with knowledge of a customer's checking and savings accounts, loans, investments, and asset management arrangements, Meridian can better target its product marketing and cross-selling efforts.
Mr. Fenimore said the absence of such knowledge hinders a bank's ability to secure new business.
"We can't today bring all of that data together and easily deliver it to a customer service representative or a bank representative who wants to try to expand a consumer relationship," said Mr. Fenimore.
"If we can provide that data effectively, we can reduce internal costs in customer service, but equally important, we can potentially raise incremental revenue through the use of that technology."
Meridian is in the final throes of a year-old data warehousing project it hopes will convert a customer information file into a "strategic weapon."
The plan is to augment internal customer information with external data that allows the bank to identify and profile its most profitable customers. This, in turn, will help the bank to focus its marketing efforts and to develop products to satisfy high-value market segments, said Mr. Fenimore.
"This could be a (very distinguishing service) for us," he said, adding that the information warehouse capability should be on-line in the next four to eight weeks.
Like many financial institutions, Meridian has also put client-server technology high on its list of priorities.
As is common in the financial industry, the bulk of Meridian's systems are mainframe computers, which are still very efficient at handling large volumes of transactions.
While the bank will not be eliminating its large-scale systems, it will be installing client-server technology for peripheral applications that support the mainframes.
"Products can be developed a lot faster using a distributed system," said Mr. Fenimore.
Client-server technology will be used in such areas as trust and investments and in the corporate market, where the bank plans to develop PC applications for its commercial customers.
"We're working off of the theory that our customers are going to want quick, easy access to information in a cost-effective manner," said Mr. Fenimore.
On the commercial side of its business, Meridian is also focusing on reengineering its operations to make better use of its account managers.
Over the next few months, the bank will put into motion "Focus 2000," an initiative aimed at providing technology and information to account managers, to help them increase their efficiency and the value of their customer relationships.
The key to the project will be to free up managers' time by allowing them to become "telecommuters," and conduct most of their business from home, or other remote sites.
To support them, the bank is developing a series of applications that deliver sales and management information and customer data to laptop-toting account managers. This will enable them to broaden the number of relationships they manage, while freeing them to spend more time on selling as opposed to administrating, said Mr. Fenimore.
On the retail side, the bank continues its participation in the emerging home banking market.
The bank provides home banking and bill payment services to consumers via the telephone, and provides PC-based service through Prodigy Services Corp.
Meridian also worked with TV Answer Inc. - now Eon Corp. - on an interactive television project. The project, which had moved ahead in fits and starts, is now suspended. However, the bank continues to be interested in the interactive TV channel for home banking, according to Joseph Pendleton, senior vice president at Meridian.
"We believe (home banking) is a very important part of how our customers are going to be dealing with us in the future, and we are very committed to providing the right technology," said Mr. Fenimore.
Yet another main focus for 1995 will be leveraging the bank's core competencies into businesses that service Meridian and other organizations, said Mr. Fenimore.
It will be in efforts like this one that the business and technology areas of the bank will have to communicate most effectively.
