Wednesday, July 31, 2013
An Opportunity Named Santander
Rob Kimmett, Sr. VP Marketing, New England Credit Union Services, LLC
Changing a financial institutions name is a very delicate exercise as may in the credit union world can attest. The institution must keep the existing customer base loyal while creating excitement and energy around the new identity in the hope of attracting new business. The biggest risk is the possibility that current customers or member will think that their institution has been acquired and that they will have to deal with big changes in fees, rules and perhaps accessibility.
Given Sovereign’s history they are particularly at risk in this regard. The bank’s U.S. operations are limited to eight states in the Northeast. It was originally chartered in Pennsylvania in 1902 and it took on the name Sovereign in 1986. The bank came to New England in 2000 when it acquired 285 branches in MA, RI, CT and NH that Fleet Bank shed in order to complete its acquisition of the faltering Bank of Boston. The end result being that a large number of consumers found that they were suddenly doing business with a regional bank from Pennsylvania that previously had no presence in the area. In 2004 the remainder of Fleets customer base ended up at Bank of America when Fleet ceased to be.
Sovereign Bank formed a partnership with Santander in 2005 and was acquired by this Spanish bank in 2009. Santander is a huge Spanish banking company that prior to this banding move had no presence in the retail banking market. According to the BBC Santander is the “Largest bank in the Eurozone.” (Santander takes its name from a city on the northern coast of Spain near the border with France. It has a population of less than 200,000.)
Here a few reasons why credit unions should concentrate their marketing efforts on acquiring business from Sovereign during the transition:
- The Sovereign brand is not among the strongest in our market.
- The history of mergers and acquisitions endured by BayBank/Bank Boston/Fleet/Sovereign customers is not likely to make them amenable to the idea of a new bank or bank brand.
- Santander has made it clear that they plan on touting their global foot print as a key brand asset. Consumers are not likely to see that as a benefit.
- Consumers that are paying attention to the world economy will know that the Spanish economy is not among the strongest in the Eurozone and while that should in no way effect their accounts it is not going to have a positive impact.