When I wrote recently that major banks have lost interest in correspondent banking-which used to be the glue holding banks of all sizes together-a number of correspondent people contacted me to say their banks were still alive and well in the field.
No bank was more vehement than Chase Manhattan Corp. This is understandable. Firstly, I had mentioned Chase specifically as an institution whose correspondent head did not seem to care about telling its story to community bankers. Secondly, among the banks that merged over the years into what is now Chase was Manufacturers Hanover, which made a hero of any officer who brought in a new correspondent account.
Laura A. Bonsett, vice president in charge of community banks and thrifts, disabused me of the idea that Chase is now a halfhearted player in correspondent banking. In fact, she has the kind of enthusiasm for the field that used to be widespread.
Amazingly to me, Ms. Bonsett started with a smaller bank, Merchants Bank of Indianapolis. (The flow usually goes the other way.) But even more interesting is why Chase wanted her and gave her this assignment: Her background is in operations, and it includes writing two books on operations services for banks.
Ms. Bonsett said everybody on her staff at Chase-those who travel as well as the stay-at-homes-has a strong operating background plus 8 to 40 years of banking experience.
Over time, respondent banks have demanded ever more technical services. They now include everything from cash management to credit and securities processing, not to mention help in selling insurance and investment products. So Ms. Bonsett makes sure her employees get ongoing training to keep up.
"Why should anyone use Chase instead of its bank or nonbank competitors?" I asked.
Strange I should ask, she joked-and then offered a whole list of reasons. Here is some of what she told me.
Chase doesn't own banks throughout the nation (other than Texas Commerce Bank), so it is not competing for correspondent banks' customers- and is therefore not anxious to steal accounts using the information that respondents reveal.
Years of relationships with the banks have generated trust and a feeling that Chase knows what they need.
Ms. Bonsett's people have the technical training to mediate between the respondent banks and Chase's specialists in many areas, especially investment banking and capital market purveyors.
Chase wants to sell the respondents more than just correspondent services, so it goes the extra mile to develop new capabilities to build relationships.
Instead of having to contact one company for investment advice, another for operations, and so on, a respondent bank gets one Chase person or team to handle all its needs. It's the same one-contact-point system that personal banking departments use.
All this didn't entirely shake my view that large banks don't want correspondent business anymore. For one thing Ms. Bonsett, though her department services 1,100 banks or so, has only six relationship managers reporting to her.
Her answer: "Our group is only nine months old, and also we rely on the backup of Chase's full staff to do the heavy work once we analyze what respondents need."
In any event, all this is far, far better than the old days when big- bank traveling officers would admit: "Monday, Wednesday, and Friday we serve the respondents; Tuesday, Thursday, and Saturday we try to steal the customers."
A money-center banker who was a student of mine back then was asked what he did for a living.
"I handle the portfolios of correspondents," he said. "But when I get good enough, they'll take me off the correspondents and put me to work for the bank."