MARKET FOCUS: FINANCIAL - Rebirth of banking. From tech integration to complex consolidation, the financial industry is adjusting to a whole new set of rules - and the PR possibilities have never been so exciting Robin Londner reports.

A little over a year ago, the water broke in banking. The Glass-Stegall Act, a 1933 law prohibiting the merger of banking, insurance and investment firms, was repealed and banking was legally reborn as a diversified industry. Investment institutions such as J.P. Morgan were free to merge with consumer banks like Chase, giving rise to mega-banks that strive to be all things to all people.

A little over a year ago, the water broke in banking. The Glass-Stegall Act, a 1933 law prohibiting the merger of banking, insurance and investment firms, was repealed and banking was legally reborn as a diversified industry. Investment institutions such as J.P. Morgan were free to merge with consumer banks like Chase, giving rise to mega-banks that strive to be all things to all people.

A little over a year ago, the water broke in banking. The Glass-Stegall Act, a 1933 law prohibiting the merger of banking, insurance and investment firms, was repealed and banking was legally reborn as a diversified industry. Investment institutions such as J.P. Morgan were free to merge with consumer banks like Chase, giving rise to mega-banks that strive to be all things to all people.

With 191 deals announced in 2000 reflecting an aggregate transaction value of dollars 89.9 billion, banks are quickly becoming full-service commercial and wholesale institutions, which would have been unheard of five years ago. Just last month, Citibank unveiled a dollars 1.6 billion cash deal to buy European American Bank.

For financial PR practitioners, it's a brave new world. Not only must they learn new aspects of the business, they also must fight to keep their messages and institutions from becoming muddled by the rapid-fire changes of a consolidating industry.



Keeping pace with changes

New regulations mean that bank PR jobs, which once focused on quarterly earnings releases and corporate sponsorships, now include the more complex world of M&A as well as internal and external PR for constantly growing and changing audiences. Entire PR teams are now dedicated to technologies that didn't exist just a few years ago, and to collaborations that would have been illegal before the Glass-Stegall repeal.

Peter Stack, SVP and associate director of Ketchum's corporate practice, has worked in banking communications for 15 years and led one of the PR teams involved in J.P. Morgan's merger with Chase. The danger, he believes, is an unfocused PR strategy that sends the right messages to the wrong audience.

'In this consolidating market, banks must convey a strong strategy to compete,' says Stack. 'Only a few banks are going to be left standing. You have to show why you will be one of them.'

Indeed, some banks aim to show their strength by bucking the M&A trend.

Scott Scredon, national media relations manager for Bank of America, which for the past 15 years has grown mainly through acquisitions, says his firm is turning its PR strategies from acquisitions to internal growth.

With more diversified product lines, Scredon says he can invest his energies in four to five identified growth areas, some of which would not have existed under the same roof just a few years ago.

'The consumer bank is a little more than half our revenue and income,' says Scredon. 'We have media relations professionals dedicated to asset management, e-commerce and investment banking. The PR strategy is to focus on businesses we think will continue to grow.'

PR practitioners at many banks are using regulatory changes another way: as a podium on which to promote their companies and their services. Jon Teall, VP at communications firm Morgen Walke, says promoting investment bank Sandler O'Neill became much easier as soon as M&A activity was ratcheted up when Glass-Stegall became history.

'The repeal of Glass-Stegall has given us more to talk about with the media, which puts us more top of mind with reporters and editors,' says Teall. 'We stress Sandler's experience and involvement in the field, to both the trade press and to national media. PR has become more exciting with more opportunity because there is more activity and more possibilities.'



Cashing in online

While regulatory changes have allowed banks to diversify their product lines, legislation isn't the only factor affecting the lives of financial PR practitioners. New technologies have made banking a 24-hour, seven-day-a-week enterprise with fewer transactions taking place via tellers and more business being conducted via the phone, the Internet and ATMs.

With fewer and fewer customers showing up inside banks, brand marketing is becoming more and more challenging.

Wendy Grover, VP of corporate communications and director of Internet services at Wells Fargo, says the best way to reinforce your online presence in the brick-and-mortar world is often a good, old-fashioned PR stunt.

For example, Wells Fargo's one millionth online customer was recently awarded one million pennies. The Associated Press picked up the photo.

'It was pre-planned as a strategy to provide a visual expression of our online leadership,' says Grover, who also makes use of partnerships with Internet brands such as eBay to reinforce the brand online.

Although Wells Fargo has offered Internet banking services since 1995, the bank itself dates back to 1852, and today it has 4,300 banks in 22 states. NetBank, online since 1997, has never had a physical presence to reinforce its online brand, yet the bank has 162,000 accounts, dollars 1.8 billion in assets and customers in all 50 states and abroad.

Matthew Shepherd, PR manager for NetBank, says not having a physical presence means his staff has to narrow their efforts to lure customers who are already familiar with e-commerce - and therefore more receptive to banking in cyberspace.

'I think there is a learning curve for people to be comfortable with online financial services,' says Shepherd. 'We market on the Internet, primarily on portals and financial sites, because those sites give us direct access to people who are already comfortable with the Internet.'

In addition to being a medium for banking transactions - both b-to-b and b-to-c - the Internet is increasingly being used by banks to convey their PR messages. Like many financial industries, banks have their own network of Internet sites, chatrooms and bulletin boards. Television news coverage has also gone 24-hour. Stack says CNN and MSNBC have made financial news equal to sports as a topic of interest and entertainment.

'With people being so much more interested in all of these topics - financial services, stocks, retirement - PR can play to the sweet spot of the news that has to fill this huge vacuum in business and finance,' says Stack.

'PR has more access to hearts and minds than ever when it comes to financial services, and we have to be smart in using all these vehicles effectively.'



Dealing with the downturn

Jon Newman, VP of media relations at Martin Public Relations, an agency with 10 years of experience serving financial clients, says marketing outreach is the best way for banks to make a name for themselves. This is especially relevant in the light of a downturn in the economy - financial institutions are often one of the few sectors to be shielded, as consumers seek safe places to put their wealth.

'There is still a big market out there to be a bank that is identified with information, with certain services,' says Newman. 'Especially if the economy is going to turn, this is a time to get out the good information and show there are more layers than just credit card solicitations.'

Barry Koling, director of corporate communications at SunTrust, a bank serving the Southeast and mid-Atlantic states, puts forth a different argument. He says increased competition forces banks to wring the 'fluff' out of their PR, necessitating a more focused marketing effort for attracting customers and with a direct relationship between PR and sales. Koling believes the major PR issues facing his bank are to establish the institution's strength of franchise, product mix and balance sheet strength. He says PR efforts that don't support one of those goals should be questioned.

'Every PR effort we undertake needs to have a justification, more so than in the past when budgets were bigger,' says Koling. 'We're in more of an earnings-conscious environment and we look at PR as capital resources to be invested. We used to give speeches on broad policy issues, but that's been replaced by analyst presentations.'

As financial PR professionals continue to learn how to promote their banks in the new regulatory environment and through new media, and as media like CNBC and Yahoo! continue to monitor every blip in the financial industry, bank PR officers can take heart: at least their jobs aren't boring.



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