WITH NONBANK institutions steadily making inroads, banks no longer have a corner on the trust and investment management market.
That customer erosion has led a number of big trust banks to look for ways to hang on to those clients.
Amsouth Bancorp., Birmingham, Ala., is one institution that faced disintermediation early, and moved to distinguish itself from the competition with customer service before those dollars could be redistributed.
Amsouth's decision two years ago to beef up its trust and upscale-banking area seems to have paid off handsomely. This line of business generated 32% of the bank's noninterest revenues for 1992. Overall, Amsouth posted net income of $102 million in 1992 compared with $80 million in the previous year.
"Wealthy clients have many alternatives for their managed funds and they expect superior service quality," said Lee Weathers, executive vice president of the $9.8 billion-asset bank's trust division. "We needed a way to find out how we were doing from our customers' point of view."
As Mr. Weathers recalled, the choices were either to develop a proprietary method of measuring service quality or to outsource the process. After an extensive cost/benefit analysis, the bank decided to take the outside route.
Amsouth uses a new survey system called the Trust and Investment Management Services Monitor, a joint development of Brittain Associates and SourceOne Consulting Group, both based in Atlanta.
Using a brief questionnaire which is based on previous surveys and focus groups, Brittain Associates feeds the customer evaluations into a data base to compare the responses to industry averages.
The survey, which is tabulated on standard marketing research software, evaluates issues such as frequency of client contact; accessibility to personnel by phone or in person; staff listening and communication skills; investment officers' skills and knowledge; understanding of the client's goals and objectives; value perceptions; clarity of forms, reports, and statements; and convenience.
Specifically, the program evaluates the performance of administrative officers, investment officers, and individual departments.
"It helped us make sure that we were moving in the right direction," Mr. Weathers said.
Industry observers agree that with brokerage firms, private investment management companies, and mutual fund managers all competing for the same market segment, banks are becoming more aggressive in satisfying customers.
"Banks are taking a more defensive stance with firms taking their customers away," said William M. Arnold, a principal and manager of financial institutions consulting at Towers Perrin, Atlanta. "Banks are beginning to ask their customers what they want to buy, why they buy it, and who they want to buy it from."
With the help of the monitor. banks can retain and grow their market share, Mr. Arnold added. Aside from giving institutions the inside track on improving service quality, it can help banks to prop up their image, he said, noting that the survey sends the message that the bank is interested in more than just the client's dollars.
"Banks are trying to make it clear that what their customers have to say is important." Mr. Arnold said.
For Amsouth, the real benefit of the program is candid client feedback. All questionnaires are mailed back directly to Brittain Associates, so clients are more likely to speak their minds in the safe confines of anonymity.
"We're very interested in what the customers really think about us and that we're making the right decisions in our trust area," Mr. Weathers said.
The survey's findings were both good and bad, according to Kathryn W. Miree, vice president of the trust department.
"We found out that what we do well is respond to customer needs and requests," she said. "But what we also found out was that we didn't give customers enough proactive contact. They want to know more about our products and they want us to take a more active role in finding out their needs."
Brittain Associates provides all the necessary draft documents as well as the questionnaires and response envelopes. Banks personalize and mail the survey packet, send out reminder cards a few days later. Once the survey is tabulated, the bank receives clear assessments and recommendations in a written report as well as a personal presentation.
Once all the returns are in, Britain Associates and SourceOne feed the scores into a data base and compare them with industry averages - thus picking out strengths and weaknesses and laying out recommendations for the bank.
A key selling point for Amsouth was the way the information in the report is presented, Mr. Weathers said.
The report included an executive summary with recommendations, he said. Also included was a clarification of data indicators and best uses of the data along with instructions for further analysis of the survey's findings about Amsouth.
Armed with the results from the survey, Amsouth looked to the Washington-based Advisory Company for help in mapping out its future.
In early May the bank sponsored a one-day forum to come up with strategic plans for the department.
"We took the data and put it into context and practical use," Ms. Miree said.
Looking ahead, Amsouth plans to use the monitor as an annual tracking study to provide management with a periodic report card alerting it to the status of, and achievements in, service quality areas.
"We're going to use this survey as a benchmark for the future so that we can see the progression," Weathers said.
The program costs include a set annual base fee of $11,500 and a $3.35 charge per contacted client. For example, a department mailing to 500 clients would invest a total of $13,175.
A larger department with 4,000 clients could select a random sample of perhaps 1,000 - thus investing a total of $14,850.
Though only a small percentage of banks have experimented with this sort of surveying process, industry experts expect more and more banks to give it a try as nonbank institutions continue invading the market.
"The information age has forced the industry to examine itself," said William T. Gregor, senior vice president and director of financial services at Gemini Consulting, Cambridge, Mass. "You'll see more and more of these data base surveys spring up as banks more deeply try to understand their customers and see how to keep them."
Mr. Weathers voiced confidence that Amsouth and its employees have found a way to help keep their trust customers close to home.
"We're giving our customers a voice and that makes them very happy," he said.