The 170 community bankers who gathered in St. Louis for the 11th annual bank card conference of the Independent Bankers Association of America heard familiar advice about market imperatives.
In the shadow of the Gateway Arch, the bankers were urged to develop existing card products while maintaining their special strength - customer service.
"Community banks need to respond to the marketplace," said Frances M. Dale, president of Virginia-based Entandem Inc., a marketing and financial services consulting firm.
"Generation X will demand services that provide convenience and utility," she added. "If you don't offer it to them, they will go elsewhere."
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Revisiting a theme of last year's meeting, speakers repeatedly exhorted the community bankers to embrace technology without fear of the larger card issuers.
William Brennan, senior vice president of member relations, MasterCard International, discussed the opportunities chip cards and other technology afford in developing new products that can replace cash and checks.
"We need to find a way to market cards to an entire household," said Mr. Brennan. "The industry hasn't broken the surface of cobranding opportunities, and the growth opportunities in debit cards are five times what can be developed in credit."
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Sales-oriented training and computer literacy should be priorities among bankers, said David Peterson, president and chief executive officer of Goldleaf Technologies, a Hahira, Ga., supplier of electronic banking software and financial consulting.
Mr. Peterson cautioned that banks should not overemphasize technology and become "robobanks." Instead they should encourage cross-selling and active listening to customer needs.
"Upper management needs an attitude change," said Mr. Peterson. "The card business is not a game. It's serious business, but you can have fun while promoting it."
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In an interview, one banker said expansion and acquisition, not technology, were his bank's priorities.
"Chip technology is too expensive and will not make a significant change in our market share," said Vinson McCarty, assistant vice president and head of retail lending at Industrial Bank in Washington.
Industrial, with $250 million of assets, has issued 300 cards, with $600,000 of outstandings.
"Our card program, though young, is very strong," he said, "which is something that we want to continue with several affinity programs in 1997."
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With bankruptcies on the rise, Michael Beindorff, executive vice president of marketing and product management, Visa U.S.A., said banks could improve profitability by focusing on debit cards.
"Even though the top 25 banks have 80% of the credit card market, more than 80% of checking accounts are held by banks outside the top 25," he said. "By the year 2001, the debit card business could increase from $50 billion to over $500 billion."
