CAST SERVICE HIGHLIGHT

Channel Migration
Optimize channel usage and strengthen customer relationships

In recent years, financial institutions have invested significant resources to develop lower cost delivery capabilities for many of their products and services. However, the benefits expected by shareholders are often not obtained, as many channel adoption issues were not anticipated and have not been addressed. 

Common Channel Usage Issues

AMERICAN BANKER - B of A, Citi Use Advanced Features in Payment Tools

Banking technology executives have been promoting for years an advanced systems-design format that they say offers a wide range of advantages but has been used mainly for small, discrete projects.

But the cash management efforts announced this week by Citigroup Inc. and Bank of America Corp. are among the biggest projects to date to take advantage of service-oriented architecture, as the format is known. Analysts say that as the technology becomes more widely used it could improve banks' abilities to connect their systems to those of their corporate customers — and to each other.

Citi announced its CitiDirect BE (for "banking evolution") cash management platform, which includes such advanced online capabilities as user-generated content and a video channel. Technology executives often refer to this type of collaborative Internet feature as Web 2.0.

B of A, of Charlotte, said it is developing a payments hub that it expects to handle transactions for a wide range of cash management customers, domestic and international, from small and midsize businesses to large corporate and trust clients. Both companies made their announcements in Hong Kong, where the global financial cooperative Swift is holding its annual Sibos conference.

Jacob Jegher, a senior analyst at the Boston market research firm Celent, said the announcements were a sign that banks are seeing wider benefits in service-oriented architecture and are beginning to embrace the user-friendly capabilities of Web 2.0 applications.

"This is a way to enable the bank to offer a better customer experience on the front end by having better piping on the back end," he said.

By tackling the "quagmire of legacy systems," the new technologies open the way for bankers to be a financial information resource for their clients rather than simply the executor of transactions, Jegher said. "It's a testament to where the Web has gone."

A key goal of service-oriented architecture is developing modular blocks that offer discrete functions and can be easily plugged into a bank's systems depending on what features are desired.

Gary E. Greenwald, the global head of capabilities and information products in Citi's global transaction services unit, said CitiDirect BE delivers capabilities beyond transactions and financial reporting.

"We've used a modular design to create a flexible portal," he said.

The portal is available now to more than 300,000 users worldwide, mostly multinational corporations, along with government agencies and small and midsize businesses in some markets.

Milton Santiago, the senior vice president of portal strategy and the treasury e-commerce solutions executive in the B of A Merrill Lynch global treasury and wealth management unit, said the sprawling financial services company expects to use the payments hub to streamline its internal systems.

"We are one organization, and we will have one payment-processing platform," Santiago said. "We can consolidate multiple platforms that we operate from," he said, including those of Merrill Lynch & Co. Inc., which B of A bought on Jan. 1. Santiago joined B of A when it bought LaSalle Bank Corp. in Chicago from ABN Amro Holding NV of Amsterdam in 2007.

The hub is designed to support consistent processing for all payments regardless of channel, including payments initiated online or by telephone, Santiago said. "The hub will be the router between all those channels."

B of A said it is building its payments hub using the Global PAYplus Services Platform from Fundtech Ltd. in Jersey City, which also announced the product at the Sibos conference. Santiago said B of A's online suite of services would be available in the first half of 2010.

George Ravich, an executive vice president at Fundtech and its chief marketing officer, said the hub will be able to provide more detailed reports of transaction details to B of A clients.

"This is a little different from what payment hubs are traditionally seen as. This is a way of taking a lot of information from the back office and bringing it to the front office," he said. "This is the type of product that fulfills the promise" of service-oriented architecture.

The Fundtech technology will sit atop payment rails that B of A is developing in conjunction with the payments software company ACI Worldwide Inc. in New York, a project that the banking company announced in May 2008.

"We will not replace our money transfer systems," Santiago said. "This is middleware."

Citi worked with Microsoft Corp. of Redmond, Wash., to put an SOA layer on top of the CitiDirect platform that it introduced in 1999, Greenwald said. "Working with Microsoft, we figured out a way to make some of the legacy CitiDirect functionality available in a way that can coexist within the portal."

Citi developed the new services in conjunction with a handful of users in different parts of the world over several years, but the new capabilities have only this month gone into general commercial use, he said.

Bindia Hallauer, the chief technology officer in Microsoft's worldwide financial services unit, said that as with many of its cash management services, Citi plans to white-label the technology to regional correspondent banks for their corporate clients.

"Citi and Microsoft have been collaborating for many years to market and sell this next-generation corporate e-banking platform," Hallauer said. And with its search, analytics and rich media features, she said, "this is going to raise the competitive bar."

Six weeks ago Citi began providing consolidated transaction reporting to a group of about 20 companies in Poland; other features — online analytics, rich media and electronic bank account management — have been tested with two to five clients each for one to two months, Greenwald said. "It's like a restaurant preopening," he said. "We want to make sure everything works, then we'll turn on the spigot and go full blast."

AMERICAN BANKER - Dodd Preps Bill to Limit Fees on Overdrafts

WASHINGTON — A drive to restrict overdraft fees is rapidly gaining momentum on Capitol Hill, potentially threatening a revenue stream that has become crucially important to many institutions during the financial crisis.

Senate Banking Committee Chairman Chris Dodd is drafting a bill that he hopes to introduce next week. Though details of the legislation are unclear, it is likely to require banks to get their customers' permission before enrolling them in an overdraft program.

The bill is already being actively supported by Sen. Charles Schumer, D-N.Y., the No. 3 Democrat in the Senate, who pledged last week to help push it through.

In the House, Rep. Carolyn Maloney, who helped enact credit card reform this year, is also looking for a way to kick-start overdraft legislation introduced in March.

With recent media attention on the issue, industry observers and banking industry representatives said the bill looks as if it could gain traction relatively easily — and would be hard for lawmakers to oppose.

"They are going to go to town with this stuff," said Chris Low the chief economist at First Horizon National Corp.'s FTN Financial. "Just like the first pass of card reform, I think it's too tempting because it's so clearly popular. There is so much outrage. … I don't think anyone can stop it. It's going to appeal to a lot of people."

Brian Gardner, an analyst at KBW Inc., agreed. "It's one of those few banking issues that plays well with the electorate," he said.

Though Dodd appears to have his hands full with regulatory reform and the health-care debate, his staff has been busy bringing in industry representatives and consumer groups to discuss several issues related to overdraft programs.

Though the staff members have said little about what Dodd's bill would do, the senator gave a clue in a June letter to the Federal Reserve Board, urging it to craft a final overdraft rule to require that customers "opt in" to such programs. The Fed issued a proposal last year asking for comment on the pros and cons of opting in to or out of overdraft protection. A final rule is expected by yearend.

"I write to urge you to finalize as soon as possible the proposed rule amending Regulation E that would curb abusive overdraft practices, and to provide stronger consumer protections in the final rule by requiring that financial institutions obtain the affirmative consent of consumers to overdraft services before they can charge overdraft fees (the 'opt-in' approach)," Dodd wrote.

Sources said Dodd's staff is also zeroing in on how banks decide which overdrafts to cover and how banks decide the order in which they clear transactions.

For example, some industry lobbyists argue that banks clear the biggest check first, such as a mortgage payment, because it is the most significant charge the consumer must pay. But critics, including some members of Congress, have asserted that the system is just a ruse to rack up fees since the consumer might have five smaller checks that clear the same day. If the first transaction overdraws the account, each subsequent charge will incur a fee.

The Maloney bill seeks to curb banks' imposing multiple overdraft fees by prohibiting them from manipulating the order of transaction clearing.

Sources also said that Dodd's staff is looking carefully at the best practices included in a 2005 interagency guidance that said financial institutions should not engage in marketing that encourages overdrafts, should fairly represent alternatives like lines of credit, and should clearly explain overdraft program features including that it is discretionary.

The guidance said that fees should be specific and clearly disclosed, the impact of transaction-clearing policies should be clearly explained, and consumers should be alerted before a transaction triggers any fees, including at automated teller machines. The guidance also said banks should consider capping customers' potential daily cost for the overdraft program.

Consumer groups are pushing Dodd to consider the Maloney bill. It would require banks to give consumers notice and a chance to cancel a transaction at the point of sale or at an ATM machine when the transaction would trigger an overdraft fee.

Schumer has also been talking about the subject, including touring New York this month and vowing to help enact reform. He has said that he will fight for legislation that sounds similar to the Maloney bill, requiring banks to give consumers a choice about overdraft programs. Banks should either be forced to make consumers opt in to the program, he has said, or provide an "easy method" to opt out.

Legislation should also increase disclosure in advance of fees and annual percentage rate charges on overdraft loans, Schumer has said, require banks to warn customers that an electronic transaction may trigger an overdraft loan fee and let the customer cancel a transaction after getting this warning. He also wants to prohibit banks from manipulating the order in which checks and other debits are posted if it causes more overdrafts and maximizes fees.

According to Schumer, legislation should also require banks to be proportional in the fees they charge — the fee for a nickel overdraft should not be the same as a fee for a $100 overdraft.

"Bottom line, debit cardholders are getting scammed by their banks," Schumer told constituents in Syracuse on Sept. 8. "Families across central New York are being involuntarily placed in these overdraft loan programs and getting ripped off by excessive fees. It's time to stop them dead in their tracks. This legislation will provide cardholders with a warning when they are about to overdraft from their accounts to protect them from sky-high fees and prevent banks from rearranging charges so that customers are placed in the worst possible position."

Restricting overdraft fees would hit institutions, particularly community banks, when fee income has become increasingly more important to their bottom line.

"It's hard to make money in straight banking, so you have to have fee-based activities," said Kip Weissman, a partner in Luse Gorman. "Overdraft is the flavor of the month right now. Overdraft provides support for all kinds of non-fee-based products that community banks have to offer to compete. I haven't heard any community banks that are in favor of this."

Industry groups are mobilizing against the bill, but it is unclear whether they can stop it.

"As we have said when this issue came up before, these are important programs that work very well for most consumers, and we are very concerned about legislative initiatives that can affect availability and efficiency of overdraft protection," said Floyd Stoner, the head lobbyist for the American Bankers Association.

Though broad regulatory reform remains the dominant banking issue, analysts and lobbyists said they could easily see Congress adopting reforms targeting overdraft fees either as a stand-alone bill or as part of the financial services revamping.

Some lobbyists speculated that Maloney might seek to add an amendment specifically dealing with overdraft charges to a bill to create a consumer protection agency. "I'm working closely with Chairman Frank to bring relief to consumers who have been overburdened with outrageous overdraft policies," Maloney wrote in an e-mail to American Banker. "I'm redoubling my efforts on the issue this fall to give consumers the kind of notice and opt-in provisions that were applied to credit cards in my credit card reform bill."

AMERICAN BANKER - Next Up: Bank Employee Unions?

In the corporate war on the proposed Employee Free Choice Act, bankers are nowhere to be found.

The American Bankers Association offers up no position about the controversial legislation that would ease restrictions on union-organizing activity. On the Web site of the Financial Services Roundtable, a link on labor policy issues passes visitors off to the U.S. Chamber of Commerce to read polemics against the act's "card-check" union election rules and controversial federal arbitration for contract disputes.

But a small band of anti-union consultants is alerting bankers that they are more vulnerable to potential workforce organization than they realize. Worried about the proposed provisions in the bill, as well as growing public anger and job insecurity among low-level financial workers, they warn that unions are beginning to place banks in their cross-hairs by participating in corporate campaigns on ancillary issues, such as executive pay and consumer-protection initiatives. These corporate campaigns are a "very common and increasingly popular tool of organized labor," said Kevin Elliott, a senior vice president in the San Francisco office of the public relations firm Hill & Knowlton. The not-so subtle message, Elliott says, is that the campaigns would stop if the companies let employees unionize.

The proposed Free Choice Act is fully supported by the Obama administration, but it has a long way to go before it becomes law. The general consensus is that it will pass the House sometime later this year but that it faces a tougher road in the Senate.

Business groups say that the bill, as currently written, would create the most drastic change in labor laws in 60 years. Among other things, the legislation would allow workers to organize collective bargaining units by majority sign-up (instead of employer-contested elections), and would let government arbiters decide on contracts in the event of stalemates. Most banks are non-union, but if concentrations of bank employees at, say, call centers or large urban branch offices take advantage of these new rules to organize, there can be a substantial impact to not only a bank's salary and wage structure, but to their capital standing and merger prospects as well, experts say.

Union organizers typically set their sights on the likes of retailers and health care providers, but the financial crisis has set the stage for some aggressive campaigns against the financial-services sector.

Earlier this year, for example, the Service Employees International Union launched an email campaign against Bank of America over CEO Ken Lewis' approval of bonuses for Merrill Lynch executives. The protest encouraged activists to engage BofA employees with the talking point that tellers' average annual salary ($24,000) is less than what former Merrill Lynch CEO John Thain famously spent on curtains in a $1.2 million office renovation.

Steven Lerner, an SEIU director, says the labor powerhouse ultimately wants bank workers to have a larger say in an institution's affairs. "We've agreed that part of fixing finance is regulating from above," he said. "But, as important, there needs to be regulation from below...in allowing workers to get a voice in the job."

For example, union-organized bank employees could negotiate compensation for selling sound products and services, he said, "versus having quotas and incentive systems that encourage, and force, people to sell products that don't work."

A unionized organized workforce would take a big bite out of bank profits, according to a report this year from Griffin Financial Group in Pennsylvania. Citing data from an unnamed unionized bank, the report estimates that the bank pays 7 to 8.5 percent more in salaries and benefits than its peers, and typically pays $50,000 to $100,000 more in legal expenses, which can double during years with contract talks. The report notes that another unionized bank, Ameriserv Financial in Johnstown, Pa., has suffered lower market valuation despite having a higher tangible common equity ratio, more regulatory capital and a better net interest margin than its peer group. Ameriserv's price-to-earnings ratio is only 7.36 percent, compared to a peer group average of 11.27 percent; and its price-to-tangible book value is less than half that of similar banks. Ameriserv officials declined to comment.

There have been signs that the legislation could be effectively neutered by the Senate, where conservative Democrats (including GOP-convert Arlen Specter of Pennsylvania) appear willing to compromise on card-check and arbitration. But that could depend on the political momentum the White House and unions have from the health care debate, and Elliot says there are other provisions that should make employers and bankers wary, such as limits on employer communication to workers during an organization campaign.

He's counseling banks on surveying workers now to discover what's eating them. That, more than savvy PR tactics, may be the best way approach. If employees "believe they have a clear understanding of role with bank, and they like that role they have, then [the bank is] less vulnerable."

AMERICAN BANKER - Remaking the Retirement Plan, Post Crisis

Well before the financial crisis and recession, the traditional concept of retirement was outmoded — dashed by the rise in longevity and the enormous changes in social and cultural mores wrought by the generation born between 1946 and 1965. Boomers came of age rebelling against their parents' political and social views. Boomers were the generation that coined the concept of the generation gap. So why would we expect them to follow in their parents' retirement footsteps?

The 77 million American boomers, now between the ages of 44 and 63, see traditional retirement as a period of personal diminishment, dependency, social isolation and stagnation, and they want none of it. Boomers will work longer, not just because they have to, but also because they want to. While a paycheck remains extremely important, anyone who has been laid off in this recession knows that work also provides a sense of belonging and purpose, interaction with people of all ages and structures our daily living.

Retirement was never meant to last for decades and current longevity is the reason why uncapped defined-benefit pension plans are an unsustainable financial burden on business. The demise of DB plans, as well as the sharp decline in employment tenure, has pushed the headache of retirement planning onto individuals. Most boomers are unprepared to support themselves (and often their ailing parents or adult children) over a multi-decade retirement period.

Household wealth relative to income has fallen sharply in this recession and roughly one-third of boomer homeowners are shackled with mortgages that exceed the value of their homes. While households have tightened their belts in the past 18 months, the rise in savings rates has largely been the result of the government's tax-cut boost to disposable income. Spending as a share of pre-tax personal income has not declined at all. The savings rate needs to climb much further to rebuild nest eggs and to lower household debt ratios to the pre-credit-boom levels of the mid-1990s.

There will not be much help from government, as the social safety net is not sufficient to fully support the living standards of even median-income retirees. According to a 2009 study by the Organization for Economic Cooperation and Development, Social Security and Medicare in the U.S. replaces only 44.8 percent of pre-retirement income for median-income families earning roughly $50,000 a year. The replacement rate rises to 58 percent for poorer households (earning half the median income) and falls to only 33 percent for household income of twice the median. The richer the household, the more dependent it is on its own ability to save and invest. In Europe, for example, the net income replacement rate for the median-income household is generally above 60 percent, as high as 75 percent in Italy, and even higher still in Scandinavia. In Canada, it is roughly 58 percent.

The financial crisis has altered the rules regarding portfolio longevity. No longer is it prudent to assume that an initial withdrawal rate of more than 5 percent will cover a multi-decade retirement period. Those early retirees who were forced to sell portfolio assets at markedly depressed values in 2008 have damaged irreparably the longevity of their nest egg, forcing many to return to the workforce or meaningfully cut back their spending. The labor force participation rate of people 55 and older continues to rise sharply to 50-year highs and it is this group that accounts for most of the rise in small business start-ups and self-employment.

Boomers are still the healthiest, wealthiest generation in history. They can and will work longer, cut their budgets and lower their expectations regarding retirement lifestyle and large bequests. The new frugality will be accompanied by a heavy dose of affordable luxuries and travel-like experiences. Home entertainment and personalized recreation will continue to boom. Insurance-related products, such as annuities and guaranteed-income products, though expensive, will become more popular as boomers reduce risk. People will want their banks to help them simplify their financial lives as the economy recovers.

With the aging of the population, the number of workers between 35 and 44 will continue to decline. Younger workers cannot fully fill the gap in either numbers or experience, so boomers will be welcome participants in the workforce. Employers will offer job flexibility, and technology increasingly enables remote employment. To be sure, many boomers have been forced into temporary retirement by the crisis-induced downsizing, and some will need to switch careers or re-locate for future re-employment. For the vast majority, continued employment well beyond age 65 will be possible.

AMERICAN BANKER - Taking Charge in Turbulent Times

Last year, the No. 1 Most Powerful Woman in Banking, JP Morgan Chase's Heidi Miller (also No. 1 this year), warned attendees at the celebration dinner, "No matter what financial crisis, men, you have historically landed on your feet. But given what we're up against today as women we'd be foolhardy if we didn't think about how we should land on our feet."

The past year has forced all bank executives — men and women — to prove their mettle, and not everyone has landed on their feet. An unprecedented number of senior executives have taken a hit for their bank's, and the industry's, failings, including a number of high-profile women. Globally, 19 percent of senior women executives surveyed by Catalyst said they'd lost their jobs in the past two years, compared with just six percent of men.

In all of this, BNY Mellon CEO Bob Kelly makes no bones about his commitment to increasing gender equity in his bank's senior ranks. "Half the population is women, but the reality is that half of our senior management is not yet women," says Kelly, noting research that indicates companies "that have done a better job at getting women into the executive ranks and developing women more effectively" generate higher revenue growth and deliver "better client service and, ultimately, greater shareholder value over time."

Kelly's grasp of two undeniable truths — that having more women executives leads to stronger financial performance, and that the financial industry has a long way to go when it comes to gender equity — is the foundation of US Banker's 7th annual ranking of the Most Powerful Women in Banking and Finance.

And though it was rough overall, the year did produce some advances for senior women executives with proven abilities to perform. Former Citigroup executive Sallie Krawcheck was named head of Bank of America's Global Wealth and Investment Management unit in August; when the news broke BofA's shares shot up nearly 7 percent. BofA also promoted Cathy Bessant, formerly the head of Global Product Solutions, to head of Global Corporate Banking. Late last year, the California Public Employees Retirement System, the nation's largest public pension fund, promoted its former Chief Investment Officer, Anne Stausboll, to CEO. She is the first female CEO in CalPERS' 77-year-history. Finally, just as this issue was going to press, UCBH Holdings Inc. promoted Doreen Woo Ho, its head of commercial and retail banking and a former Wells Fargo executive, to acting president and CEO.

But the stress on the industry has taken its toll on some senior female executives who have, in essence, opted out. Of note are Lisa Binder, president and CEO of Associated Bank and a Top 25 honoree in years past, who resigned her post in May. Erin Callan, Lehman Brothers' CFO who briefly took a position at Credit Suisse, is also reportedly on hiatus.

This phenomenon isn't new. Many of the industry's most talented women make a lifestyle choice not to reach for the next rung if it means even longer hours, more travel, and less time with their families, says Diane Offereins, executive vice president of payment services at Discover Financial Services. "I am actually concerned that more women are stepping out and saying, 'I don't want to do this,'" she says.

In their recent book "Womenomics," television journalists Katty Kay and Claire Shipman note that up to one-third of professional women take a breather from their careers at some point, and that MBAs are more likely than doctors or lawyers to choose to stay home with their children. The problem with this is crystallized in something Jack Welch said recently at a Society of Human Resources Management conference: that women who choose to get off the executive track are more likely to get passed over for top jobs when they are ready to return. "There are work-life choices, and you make them, and they have consequences," Welch says.

This is damaging for the individual women, and could have a ripple effect on younger executives, Offereins fears. "I think it's important to have women in the senior ranks because they think about hiring and promoting women," she says.

It's a legitimate concern, but at least at mega-banks like JPMorgan Chase & Co., Citigroup and BNY Mellon there are well-established mentoring and networking programs to help mid-level executives get to that next level and still achieve that work-life balance. And it's good to know that programs like these have not been casualties of the financial crisis.

The 2009 Rankings
Ranking who is most powerful is not an exact science — and it's not easy, especially in a year like this past one. Performance counts, to be sure, but editors also recognize that a bank's numbers could be skewed by an event like re-paying TARP money or selling a business unit to raise capital. That's why other factors, like a nominee's job responsibility, management style, crisis-management skills, influence within the industry, and charitable endeavors are given strong consideration. Once again, there are four categories: The 25 Most Powerful Women in Banking; The 25 Women to Watch; The Top 25 Nonbank Women in Finance and The Top 3 Banking Teams.

Fifty-two women are repeat winners from last year — though not necessarily in the same categories — and several others return to the rankings after an absence. For the third straight year, Heidi Miller, the CEO of JPMorgan Treasury and Securities Services, ranks as the No. 1 Most Powerful Woman in Banking. Right on her heels is BNY Mellon's Karen Peetz, who moves up from No. 6 in 2008. Large banks, not surprisingly, are once again well represented. JPMorgan Chase and Citi lead the way, with five honorees each among The 25 Most Powerful and The 25 Women to Watch.

Eight women who were among the The 25 Women to Watch last year have moved up to The 25 Most Powerful Women in Banking. That group includes Lynn Pike, the president of Capital One Bank, who was the driving force behind Capital One's acquisition of Chevy Chase Bank of Maryland, and finally gave McLean, Va.-based Capital One a retail presence in its own backyard. It also includes MetLife Bank CEO Donna DeMaio, who engineered the acquisition of First Horizon National Corp.'s mortgage business that led to record profits for the bank.

Three women who ranked among The 25 Most Powerful last year — including Krawcheck, who was No. 5 — wind up either on The 25 Women to Watch or The Top 25 Nonbank Women in Finance after switching jobs. (The rules of the rankings require women to be in their current positions for at least year to be considered for The 25 Most Powerful Women in Banking.) Krawcheck's ranking as the No. 1 "Woman to Watch" seems especially appropriate. The ink was barely dry on the news release announcing her hiring when she was already being mentioned as a possible successor to BofA CEO Ken Lewis.

One interesting newcomer to the rankings is BBVA Compass retail chief Shelaghmichael Brown. Brown was honored for smoothly integrating a string of acquisitions in the Southeast and Southwest. What we didn't know until we interviewed her was that, after years of moving up the executive ladder, Brown left banking for four years earlier this decade to help her then-teenage sons with their studies. CEOs, boards and Jack Welch take note: Brown is proof that even after an extended hiatus, women can maintain their drive and passion, and pick up where they left off.

The 25 Most Powerful Women in Banking 2009
1) Heidi Miller, JPMorgan Chase & Co.
2) Karen Peetz, BNY Mellon
3) Pamela Joseph, U.S. Bancorp
4) Barbara Desoer, Bank of America
5) Carrie Tolstedt, Wells Fargo
6) Peyton Patterson, NewAlliance Bancshares
7) Deanna Oppenheimer, Barclays PLC
8) Mary Callahan Erdoes, JPMorgan Chase
9) Diane Thormodsgard, U.S. Bancorp
10) Julie Monaco, Citigroup
11) Lynn Pike, Capital One Bank
12) Cara Heiden, Wells Fargo
13) Avid Modjtabai, Wells Fargo
14) Donna Demaio, MetLife Bank
15) Mollie Hale Carter, Sunflower Bank
16) Diane D'Erasmo, HSBC USA
17) Ellen Alemany, Citizens Financial Group and RBS Americas
18) Anne Arvia, Nationwide Bank
19) Anne Finucane, Bank of America
20) Ellen Costello, Harris Bankcorp
21) Colleen Johnston, TD Bank Financial Group
22) Shelaghmichael Brown, BBVA Compass
23) Diane Reyes, Citigroup
24) Kay Hoveland, K-Fed Bancorp & Kaiser Federal Bank
25) Leeanne Linderman, Zions First National Bank

AMERICAN BANKER - Teller Flow at the Heart of Capture's ROI

Most financial industry veterans would agree that remote deposit capture (RDC) is a game-changing development that lowered the cost of item processing. However, as the industry approaches the six-year anniversary of the passage of the Check 21 legislation, many banks still lack a sophisticated capture strategy. In fact, it was estimated at the 2009 BAI Remote Deposit Capture Summit that only 60 percent of all financial institutions have deployed branch capture technologies, and the number is substantially less for teller capture.

By the end of 2009, the Federal Reserve will have closed all but one of its paper-processing facilities, creating an imperative for banks to focus on branch or teller capture strategy before costs go up dramatically. Best practices in payments, supported by impressive ROI experiences from early-adopter installations, dictate that the most efficient mode of branch capture should be conducted at the earliest point of presentment possible: the teller line.

While most institutions recognize the workflow efficiencies of capturing items at the teller station, they discount this option because they think it is too expensive and slow. The industry has been led to believe, often by first-generation capture technology providers, that a single branch capture solution is the best strategy.

Teller capture systems provide a more efficient check processing transaction, freeing up a substantial amount of time for additional teller activity. Studies have proven that the time for standard teller capture transactions is not significantly greater, as no time is spent during any part of the workday closing out and entering batch information. Tellers no longer have to wait in line for other tellers to finish before they can scan their items. Because the tellers are up to date throughout the day, day-end processing becomes a thing of the past.

An early adopter of the teller capture technology, Grow Financial Federal Credit Union in Tampa, found the process added merely seconds to the transaction, and eliminated the need to do batch scanning at the end of the day. The time needed to balance at the end of the day fell from 15 minutes to five minutes.

Greater return on investment and increased operational efficiency is also achieved with teller capture solutions. The equipment and software cost for a branch is typically no less than the cost of licenses and scanners for about four tellers. In previous payments strategies, tellers had to leave the workstation to scan each batch. If tellers performed their scanning at the end of the day, queuing problems usually resulted. Teller capture solutions require a check scanner for each teller, which means that tellers never find themselves waiting for access to a scanner. Training sessions are also expedient and straightforward. All tellers in a branch can be fully trained in half a day.

An example of an almost immediate return on investment is how Grow Financial invested $857,000 in teller capture software and hardware, which included substitute check printing, 130 computers, the Primary Payment System and system maintenance. Grow Financial was able to eliminate three proofing machines and redeploy two full-time employees.

The system also strengthens fraud detection efforts, since the process involves intensive analysis of red flags. If a check presented at the teller line contains non-negotiable items, such as a missing signature, a discrepancy between the courtesy and legal amounts, or fraudulent information in the routing and transit line, it is addressed at that very moment. Scanning the check at the point-of-presentment also allows bank personnel to compare it to both internal and third party real-time fraud detection databases. This practice guarantees fraud reduction at the first point of capture and allows more items to be passed to the database, reducing the overall occurrences of fraud. Some of the current day fraud detection databases are delivering reductions in fraud of up to 90 percent. These results are only available if the items are scanned at the teller workstation.

The adoption of modern RDC solutions needs to increase if banks are to realize the substantial cost reductions that Check21 can deliver. In making the move to RDC it is critical that banks keep an open mind and seriously consider item capture at the teller workstation. For those banks still in the decision mode, it is not too late to select the superior and proven choice of teller capture. Those that do will almost certainly reduce their operational costs and fraud while improving customer service.

AMERICAN BANKER - The Top 25 Nonbank Women in Finance

Their titles may be different, but these investment bankers, card executives, fund managers and private-equity investors are under the same pressures as their banking counterparts — and are meeting the challenges head on.

The Top 25 Nonbank Women in Finance
1) Nicole Arnaboldi, Alternative Investments of Credit Suisse
2) Stacy Bash-Polley, Goldman Sachs & Co.
3) Christina Gold, Western Union
4) Abigail Johnson, Fidelity Investments
5) Anne Stausboll, CalPERS
6) Margaret Keane, GE Money
7) Maliz Beams, TIAA-CREF
8) Kathleen Murphy, Fidelity Investments
9) Catherine Smith, ING U.S. Retirement Services
10) Candace Browning, Banc of America Securities-Merrill Lynch Global Research
11) Ranjana Clark, Western Union
12) Carla Brooks, Commerce Street Capital LLC
13) Barbara Goodstein, AXA Equitable
14) Liz Beshel, Goldman Sachs
15) Joan Kelly, MasterCard Worldwide
16) Diane Offereins, Discover Financial Services
17) Susan Ehrlich, Sears Financial Services
18) Carla Harris, Morgan Stanley
19) Anne Dias Griffin, Aragon Global Management
20) Liz Ann Sonders, Charles Schwab & Co.
21) Kathy Elsesser, Goldman Sachs & Co.
22) Dana Lorberg, MasterCard Worldwide
23) Paula Reynolds, American International Group Inc.
24) Suzanne Shank, Siebert Brandford Shank & Co., LLC
25) Mellody Hobson, Ariel Investments LLC

AMERICAN BANKER - Weighing the Future of Citi 'Holding' Pen

He has slashed 100,000 jobs, built up a cash position, cut billions of dollars in expenses and overhauled management.

But the most important thing Vikram Pandit says he has done as chief executive of Citigroup Inc. was to draw a line in the sand between the businesses that would stay and those that would go as the chastened financial giant seeks to remake itself.

The keepers are supposed to focus Citi on clients instead of products. They are intended to make the company less reliant on wholesale funding and less vulnerable to the type of wild market swings that inflated Citi's profits before decimating them entirely.

But before Citi can be the bank envisioned by Pandit, it must dispose of the assets in Citi Holdings, the division composed of everything that has been deemed noncore to the company, or too toxic to hold onto.

This task looks easier today than when the creation of Citi Holdings was announced in January; unloading risk at any price looked next to impossible then. But until the slush gets mopped up from previously frozen markets, it remains unclear how swiftly Citi can move and how successful it will be in shedding noncore businesses without destroying whatever value they have retained through the crisis.

Pandit has declined to put a time frame on the strategy, but he has been quick to argue that Citi Holdings should not be viewed as a "bad bank" where troubled assets go to be punished.

"There are a number of very attractive businesses in Holdings, and these businesses, by the way, would not be in anybody else's bad bank. They just happen to be not strategic to our future," Pandit said last week at a Barclays Capital financial services conference.

The brokerage, asset management and consumer lending businesses contained in Citi Holdings cut across an array of business lines and geographies. They include a 49% stake in Smith Barney, which was put into a joint venture this year with Morgan Stanley, and a 75% stake in a pension fund in El Salvador. They include strong brands, such as Primerica and CitiFinancial, and more obscure assets, such as credit card businesses in Turkey, Greece and Portugal. Citi Holdings also is the dumping ground for toxic investments in collateralized debt obligations, auction-rate securities and structured investment vehicles.

At the end of the second quarter, $649 billion of assets sat in Citi Holdings. Managing them has required a battery of approaches because different components of the division are expected to meet different fates. Some, like the Japanese retail brokerage Nikko Cordial, will be sold, and others will be wound down as loans mature. But the end-game for each asset could change as conditions warrant.

For example, Citi had stopped making consumer loans in several Nordic countries, a sign that it would simply allow those businesses to run off. But when a buyer emerged for a consumer-finance operation in Sweden, Citi switched gears and sold it.

Overseeing all of the decisions is Michael Corbat, a 26-year veteran of Citi who has worked domestically and abroad, in businesses including corporate and commercial banking, global wealth management and emerging market debt - a breadth of experience seemingly well suited to the diversity of assets in Citi Holdings.

But the attribute that might serve him best in the role is patience. "This is a tough time to try to sell some of these assets because it's still a buyer's market," said Charles Wendell, president of Financial Institutions Consulting Inc. in Ridgefield, Conn. With other banks more interested in fleeing than acquiring businesses like auto lending and consumer finance, the pool of possible suitors is largely limited to hedge funds and private equity firms that will be eager to drive a hard bargain, he said.

But with no timetable ascribed to the disposal of Citi Holdings, Corbat said he will not be rushed into sales unless they make sense from a price perspective and in terms of the amount of risk and complexity they would allow Citi to remove from its business.

"As the market catches up and closes [in on] our price... then we look and say, 'Okay, now it makes sense to sell it,'" Corbat said in an interview.

Citi already has lined up a Japanese buyer for Nikko Cordial, and the firm plans to eventually sell the rest of its Smith Barney stake to Morgan Stanley. Smaller divestitures have included the recent sale of three North American credit card portfolios with about $1.3 billion of managed assets.

Other businesses in Citi Holdings include portfolios for mortgages, auto loans and student loans; consumer lending operations in more than a dozen countries; Afore, a retirement fund administrator in Mexico; BellSystems 24, a call center in Japan; and commercial credit card operations including Diners Club. The division also holds about $200 billion of distressed securities.

Corbat has paid visits to many of the businesses that were placed in Citi Holdings to keep employees engaged and to encourage their participation in the restructuring of their groups, reminding them that they can best position themselves by making their business attractive to a buyer who might bring over the employee base as part of an acquisition.

"You owe the employees the intellectual and moral honesty of telling them their businesses are for sale," Corbat said. But "you've introduced this uncertainty that probably doesn't age that well."

Uncertainty typically does not age well with investors, either. But between government support and other funding rounded up since the crisis began, Citi may have time on its side when it comes to resolving the fate of the assets in Citi Holdings - even the assets that cost Citi the most when the disarray in the financial markets led to painful writedowns.

"They've got the capital to hold it now," said Standard & Poor's equity analyst Stuart Plesser, who has a "buy" rating on Citi's stock. "And what else can really happen here that's going to destroy the value of these [assets] any further? There's nothing but upside here as they start reducing these assets."

ANNOUNCEMENTS - Jackson(R) Receives Multiple Awards

Marketing team receives more than 10 industry accolades for second consecutive year

DENVER – September 21, 2009 – Jackson National Life Insurance Company ® (Jackson) today announced that its marketing department has received 13 awards from various industry and communications organizations. Jackson received recognition for several of the company’s recent multimedia presentations, marketing collateral and direct mail campaigns.

“Rollover RX”, an interactive multimedia presentation, received a Grand Award in the Electronic and Video Publications category at the 21st Annual Apex Awards. The presentation was created as a part of a larger campaign to educate advisers and their clients on the opportunities for rolling over 401(k)s in today’s market. Only 11 entries received the Grand Award, Apex’s top honor, out of more than 3,700 submissions from business communications professionals across the country.

The Apex Awards are based on excellence in graphic design, editorial content and the success of the entry in achieving overall communications effectiveness across all of a submission’s target audiences.

Jackson’s “The Key Ingredient is You” brochures, created to promote the March of Dimes’ Signature Chef Auction, also won an Apex Award of Excellence, as well as a Best in Show award at the 76th Annual Insurance and Financial Communicators Association’s (IFCA) Awards competition.  The auction showcases the finest chefs and caterers while raising money to support the organization’s mission of saving babies. March of Dimes is one of Jackson’s non-profit charitable partners, and all work for the campaign was done pro bono.

IFCA also gave an honorable mention to Jackson’s “Icebergs” brochure, which educates advisers on the importance of understanding what lies beneath the surface when it comes to variable annuity contracts. An honorable mention was also given for the Life Insurance Awareness Month campaign. 

IFCA is an international organization dedicated to the ongoing professional development of its members in life insurance and related financial services communications. IFCA accepts entries for its annual awards competition from financial services companies that span banking, financial planning, equity brokerage, insurance, investment products, and individual and group savings and retirement plan providers. 

“We’re delighted to have received these prestigious communication-oriented awards,” said Dan Starishevsky, senior vice president of marketing for Jackson National Life Distributors, LLC. “Additionally, we’re very pleased that our adviser partners are continuing to gravitate toward our campaigns and educational materials as tools to help them build and grow their businesses.” 

At the 15th Annual Communicators Awards, which recognize creative excellence in advertising, corporate communications and public relations, Jackson captured an Award of Excellence and four Awards of Distinction, including one award for its newly redesigned Web site, www.jackson.com.  Roughly 10 percent of 7,000 entries from companies and agencies of all sizes received an award.

“These awards acknowledge more than Jackson’s ability to present complex ideas in an understandable and engaging format,” said Kathy Schofield, vice president of marketing for Jackson National Life Distributors LLC. “They are a testament to the company’s creative talent and ability to communicate our value proposition in an innovative and effective manner. Our marketing team’s approach to communication is a key component in positioning Jackson as an industry leader in today’s retirement planning marketplace.” 

ANNOUNCEMENTS - Major Life Insurance Distributors Demonstrate Commitment...

...to Growth at E-Z Data's 2009 Client Partner Conference

St. Louis, MO, September 15, 2009 – E-Z Data, a top provider of customer relationship management (CRM) and practice management solutions for the financial services industry, announced that nearly 100 industry professionals attended its annual Client Partner Conference for Brokerage General Agencies (BGAs) on September 13-15, 2009. Attendees included principals, office managers, and case managers from leading Brokerage General Agencies, top producers, and strategic integration partners. The event, held in St. Louis, focused on exchanging best practices and featured speakers from top insurance brokerage organizations, third-party solution providers, and E-Z Data’s BGA Services team.

Created for Brokerage General Agency principals and staff who use SmartOffice to process life insurance and annuity business, the conference is designed to give these clients a unique opportunity to network with their peers in the independent insurance distribution business, share best practices, explore winning marketing strategies, and get focused training in specific functional areas within SmartOffice.

“E-Z Data did a great job pulling together the BGA user community to deliver a valuable learning forum,” said Tom Tavenner, Vice President of The Tavenner Group of Companies and recently elected President of the E-Z Data BGA Advisory Council. “Sharing our experiences at the learning sessions gave us insights into how we can optimize SmartOffice for our practice, and the opportunity to develop relationships with other agencies and meet with SmartOffice business partners to expand our integrations was highly valuable. We’re looking forward to continued opportunities to share and learn with each other throughout the coming year.”

The conference included two days of sessions containing presentations and user panels with BGA clients, including Brown & Brown and Associates, The Caldara Company, First Heartland Capital, The Herman Agency, NSH Retirement Strategies, and SDB Sports Management. Other sessions included business and technical discussions led by the E-Z Data team, as well as presentations from some of E-Z Data’s strategic integration partners addressing how integrated solutions can help streamline BGA workflows.

The event concluded with a group session to identify and prioritize future solution enhancements. A series of twelve follow-on webinars has been scheduled to provide additional in-depth discussions on the use of specific areas of functionality within the SmartOffice solution.

ANNOUNCEMENTS - Woodbury Wins Three Awards

From The Insurance and Financial Communicators Association

Marketing team earns top industry recognition for client focus and best marketing practices

Woodbury, Minn., September 15, 2009 - Woodbury Financial Services, Inc. announced today that it recently won three awards from the Insurance and Financial Communicators Association (I.F.C.A). Woodbury's marketing materials were recognized as some of the best in the insurance and financial services industry by industry experts who judged entries based on project concept, art direction, writing, overall execution and effectiveness. The three entries recognized were:

. 2008 Deep Discovery Meridian (Woodbury's national sales conference) Guide earned Best of Show, the highest industry recognition . 2009 Women's Forum Program of Events received the Award of Excellence . 2009 Elite Producers'

Summit invitation was recognized with an Honorable Mention

"The passion our marketing team brings to their jobs reflects Woodbury's high standards and our unique 'be a home to representatives' approach to treating our reps as partners in success," said Scott Carlson, senior vice president of sales and distribution at Woodbury. "We are honored to be recognized by experts in the industry."

2008 Deep Discovery Meridian Conference Guide Each year, Woodbury hosts Meridian, its National Sales Conference, a premier development and networking opportunity for registered representatives (reps). Meridian delivers a combination of product and sales-oriented workshops, keynote speakers, top-notch product manufacturers, technology demonstrations and an opportunity for reps to network with their peers. The conference guide was created as an extension of Woodbury's 2008 theme, "Deep Discovery."

2009 Women's Forum Program of Events

The Woodbury Women's Forum is designed to help facilitate networking and success opportunities for Woodbury female reps. Woodbury believes that women can help each other achieve business success by promoting a nurturing, collaborative leadership style that brings positive changes to their practice. Female reps attend the Women's Forum to learn new business techniques, partner with peers, discuss branding opportunities and attend seminars.

2009 Elite Producers' Summit Invitation

The Elite Producers' Summit is a training and networking event designed for Woodbury's top 100 reps. The invitation was designed to set the tone for the proposed 2009 Elite Producers' Summit: The Nature of Inspiration.

I.F.C.A. is an international organization dedicated to the ongoing professional development of its members in life insurance and related financial services communications. Its primary objective is to encourage and promote the exchange of experience and ideas among its members through an extensive program of formal schools, workshops, seminars, Newsletters, research studies, networking, and an international awards competition. It is one of the largest and leading industry-specific associations in the communications and advertising field.

BANKINSURANCE.COM - Americans Say Life Insurance a "Must"

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 14 -20, 2009

BANKINSURANCE.COM - FINRA Fines Three Bank-Owned Securities Firms

…For Not Supervising Outsourced Communications

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 28 - OCTOBER 4, 2009

The Financial Industry Regulatory Authority (FINRA) has fined Citigroup $175,000, UBS Securities $150,000, and Deutsche Bank Securities $100,000 for their failures to establish adequate systems and procedures to supervise outsourced communications with their customers in the initial public offering (IPO) of Vonage in May 2006.  Because of these failures, FINRA found, the securities firms were unable to satisfactorily respond when the outside company sent incorrect IPO allocation information to numerous customers.  FINRA Chief of Enforcement Susan Merrill said, “Supervisory obligations apply not only to brokerage activities undertaken directly by firms, but also to those activities when they are outsourced to other parties.”  FINRA ordered the firms make the following in restitution to affected customers: Citigroup - $250,000 to 284 potentially eligible clients; UBS - $118,000 to 126 potentially eligible clients, and Deutsche Bank - $52,000 to 59 potentially eligible customers.

BANKINSURANCE.COM - Group Life and Disability Earned Premiums Steady

…In First-Half 2009

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 28 - OCTOBER 4, 2009

Total group term life insurance earned premium rose 3% in the first half to $8.5 billion, up from $8.3 billion in first half 2008, according to the 2009 U.S. Group Life & Disability Mid-Year Market Surveys conducted by Portland, ME-based JHA, the research division of Stamford, CT-based Gen Re Life Health.  Group term life sales premium totaled $1.2 billion, and new sales volume totaled over $366 billion, with the average face amount on a new group term life policy at $73,776.

Total group disability earned premium remained flat at $6.7 billion, with the number of employees with short-term disability policies and long-term disability policies sliding 3% and 2%, respectively.  In addition, new annualized premiums for group disability totaled over $1.2 billion, unchanged from mid-year 2008, with long-term disability sales premiums up 1%.  JHA President Drew King said, “The recession is having an impact on group life and disability sales and revenue,” as employees have been laid off and incomes have decreased.  To access the Surveys, click here.

BANKINSURANCE.COM - Harris Bank Acquires Financial Planning Firm

BANKINSURANCE NEWS IN BRIEF -- SEPTEMBER 28 -- OCTOBER 4, 2009

Chicago-based Harris Private Bank, a unit of the Bank of Montreal, has acquired Stoker Ostler Wealth Advisors, a financial planning and investment advisory firm based in Phoenix, AZ.  Harris CEO Terry Jenkins said, “Over the last three or four years we have been moving our business to offer more overall financial planning capabilities….  Clients want a more holistic experience.”  Earlier this year Harris acquired Chicago accounting firm Pierce, Givens & Associates in keeping with this strategy and its intention to expand in its current markets, Jenkins said.

In 2008, Harris Financial Corp. reported $101.7 million in investment program income, which comprised 17.7% of its noninterest income and 6.7% of its net operating revenue.  The company ranked 19th in investment program earnings among all U.S. bank holding companies (BHCs), according to the Michael White Bank Investment Fee Income Report.

BANKINSURANCE.COM - Hartford Life Distributors Launched

BANKINSURANCE NEWS IN BRIEF -- SEPTEMBER 14 -20, 2009

Simsbury, CT-based The Hartford Financial Services Group has formed Hartford Life Distributor, a company whose mission is to sell and distribute The Hartford's $25 billion in investment and retirement products, including mutual funds, annuities, 401k plans and 529 college savings plans.  The Hartford Investment and Retirement Division Executive Vice President Jim Davey said the move "further enhances our focus on the needs of our distribution partners and customers."

BANKINSURANCE.COM - Life Insurance Apps Continue Up Among Seniors

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 21 -27, 2009

U.S. applications for individually underwritten life insurance jumped 12.5% in August among individuals aged 60 and older compared to August 2008, continuing a more than two-year upward trend, according to the MIB Life Index.  Applications among individuals aged 45-59 inched up 0.8%, but applications among individuals aged 0-44 slid 3.1%, keeping overall applications even with August 2008, Braintree, MA-based MIB Group said.

BANKINSURANCE.COM - Life Insurance Important Asset During Economic Downturn

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 28 - OCTOBER 4, 2009

The majority (56%) of Americans say the economic downturn has made it more important than ever to have life insurance, according to the Life Survey of 1,000 adults conducted on-line in the last week of August.  Over 70% of those with insurance made no changes to their coverage over the past year.  Of those who did make changes, 39% increased their coverage, 28% bought insurance for the first time, 14% cancelled their coverage and 11% decreased their coverage.  Arlington, VA-based LIFE President and CEO Marvin Feldman said, "Americans realize that life insurance can be the safety net that catches their family when tragedy strikes, and we're pleased to see that so many appear to be holding on to their coverage, even as they're scaling back on other parts of the family budget to make ends meet."

BANKINSURANCE.COM - Nobel Laureate and Former Sec Commissioner Say "No" To Fed

…As Single Systemic Regulator

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 28 - OCTOBER 4, 2009

Nobel laureate and Columbia University Economics Professor Joseph Stiglitz told participants in "The New World of Financial Regulation" webcast last week that making the Federal Reserve Board the nation's systemic risk regulator is a bad idea.  "We should realize that having a single regulatory agency would not have prevented the problem."  The UK, he said, "had a unified financial regulator, and they had just the same crisis that we did….  The issue isn't more or less [regulation], but it's the structure of the whole regulatory system….  We should remember that the Fed had more powers than it used before the crisis."

Former Securities and Exchange Commissioner Roberta Karmel added that making the Fed the systemic risk regulator would pose a conflict with its role in overseeing monetary policy.  "…the Fed should not be the financial systemic regulator, at least not as long as it also has the job of prudential regulation and monetary policy.  I think those three regulatory functions are in conflict with one another … a serious conflict between prudential regulation and the responsibility for making sure that individual financial institutions have adequate capital and are adequately financed and are not on the verge of collapse, and worrying about the entire system," she said.

BANKINSURANCE.COM - Nonqualified Annuity Owners Feel "Safe"

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 21 -27, 2009

The vast majority (80%) of nonqualified annuity owners have less than $100,000 in annual income, and almost half (42%) have incomes below $50,000, according to a 2009 Gallup survey conducted for the Committee of Annuity Insurers and Matthew Greenwald & Associates.  Most nonqualified annuity owners are female (58%), retired (69%), own their first annuity (93%), and believe they have enough money to cover their financial needs in retirement (55%), the survey shows.  To read the report, click here.

BANKINSURANCE.COM - SEC Commissioner Advises Lawmakers

…To Think Before They Leap When It Comes To Regulation

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 28 - OCTOBER 4, 2009

Security and Exchange Commissioner (SEC) Troy Paredes told the Securities Industry and Financial Association at its meeting in New York City last week that regulators should "be mindful [that] … the impact of regulation may extend beyond the intended purpose.  It is difficult to fashion a regulatory regime narrowly to achieve desired results while avoiding undesirable collateral consequences.  Accordingly, it is incumbent upon lawmakers to spend the time and effort necessary to appreciate the full range of possible results, both for better and for worse, and to be willing to scale and refine regulations when needed."

BANKINSURANCE.COM - Survivors Credit Life Insurance

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 21 -27, 2009

Over half (53%) of widows or widowers who received three or more years of household income in life insurance benefits on the death of their spouse said they felt financially secure one year later, according to MetLife's Study of the Financial Impact of Premature Death.  In contrast, 27% of those who received less than three times their deceased spouse's income and 11% of those who received no life insurance felt financially secure.  Among survivors who received no life insurance benefit, 36% were forced to relocate, while 77% of those who received some benefit were able to remain in their homes.  The MetLife study is based on a June 2009 survey of 1,000 widows or widowers whose spouses were aged 25-60 at the time of their death.

BANKINSURANCE.COM - TD Bank Brands "From Maine to Florida"

BANKINSURANCE NEWS IN BRIEF - SEPTEMBER 28 - OCTOBER 4, 2009

Cherry Hill, NJ and Portland, ME-based, $134 billion-asset TD Bank, a unit of Toronto, Canada-based TD Bank Financial Group, announced that all TD Banknorth signs have been changed to reflect the bank's new name, TD Bank.  The move adds the bank's New England and New York branches to the company's Mid-Atlantic and Florida offices that were re-branded with TD Bank signage in November 2008.  TD Bank President and CEO Bharat Masrani said, "This is a truly historic moment as we become TD Bank, America's Most Convenient Bank, from Maine to Florida."

In 2008, TD Banknorth Inc. reported $56.7 million in insurance brokerage income, which comprised 6.0% of its noninterest income and 1.5% of its net operating revenue.  The company ranked 13th in investment program earnings among all U.S. bank holding companies (BHCs), according to the Michael White-Prudential Bank Insurance Fee Income Report.

M&A - Ameriprise Financial to Acquire Long-Term Asset...

Management Business of Columbia Management for Approximately $1 Billion

All-Cash Acquisition Includes $165 Billion in Long-Term Assets Under Management

Ameriprise Global Assets Under Management to Be Nearly $400 Billion

Acquisition Provides Far-Reaching Product Distribution Opportunities

Transaction is Expected to Be Accretive to Earnings and Return on Equity Within One Year

MISCELLANEOUS - 100 Best Global Brands

BusinessWeek/Interbrand Release Annual Ranking of the 100 'Best Global Brands'

Coca-Cola retains the No. 1 spot; Google, Amazon, and Zara continue strong growth

NEW YORK, Sept. 17 /PRNewswire/ -- Google, Amazon, and Zara are among this year's top gainers in BusinessWeek and Interbrand's annual ranking of the "Best Global Brands." UBS slipped dramatically down the list, falling 31 places to No. 72, losing 50% of its brand value. Coca-Cola remains the No. 1 brand for the ninth year in a row.

For the ninth consecutive year, BusinessWeek has teamed up with Interbrand, a leading brand consultancy, to publish the ranking of the top 100 global brands by brand value. Amazon, Pepsi, Audi, Panasonic, and Campbell's have all prospered during a challenging year for marketing executives. For the first time, the overall value of the top 100 brands has declined 4.6%, or US $55,472. Seven brands, however, fell right off the list. Among the biggest: Merrill Lynch, which ranked No. 34 last year, and AIG, previously No. 54, after both required emergency assistance from the U.S. government. ING, ranked No. 86 last year, also fell off the list after huge subprime losses. Not surprisingly, big banks and auto brands fared the worst, while food brands benefited as consumers began eating more at home.

The recession has presented brand stewards with the most severe test of their careers. Companies have had to adjust rapidly as consumers reexamine their purchases and rethink brand loyalties. Marketing executives are balancing the temptation to chase short-term gains with discounts and promotions against the risk of cheapening their brands over the long haul. Meanwhile, most have considerably smaller budgets with which to reach their customers.

BusinessWeek's "Best Global Brands" special report is featured in the September 28, 2009 issue, on newsstands Friday, September 18th. Expanded content, including full methodology, is available on BusinessWeek.com at www.businessweek.com/go/brand and on Interbrand.com at http://www.thebestglobalbrands.com.

1. Coca-Cola
2. IBM
3. Microsoft
4. GE
5. Nokia
6. McDonald's
7. Google
8. Toyota
9. Intel
10. Disney

For the full list: http://bwnt.businessweek.com/interactive_reports/best_global_brands_2009/

MISCELLANEOUS - Insight into Tumultuous Stock Market of the Last Decade

Anatomy of the Meltdown 1998-2008, by seasoned investment advisor Franck Prissert, explores the ups and downs of the U.S. stock market's worst decade

PALM BEACH GARDENS, Fla. (MMD Newswire) September 16, 2009 -- Anatomy of the Meltdown 1998-2008: The Worst Decade in Stock Investing, or Was It?, by Franck Prissert, aims to provide an insider's perspective on how and why the markets have been so turbulent over the last 10 years.

According to Prissert, data shows that the decade ending in 2008 was the worst in 150 years. Prissert claims that the 20% drop in household net worth and financial unrest that have unfolded can be explained by tracing events as far back as 1995.

Prissert divides recent history into two phases, the "internet bubble" and the "real estate and financial bubble." Anatomy of the Meltdown 1998-2008 maintains that these bubbles created a level of financial leverage never seen before. Prissert intends to address the long-term causes of this crisis, rather than focus on the short-term consequences.

While hopeful, Prissert believes it is almost impossible to effectively predict what the financial future will bring. The best way to prepare for stability, however, is to learn from times of chaos. Anatomy of the Meltdown 1998-2008 aims to educate its readers in order to help prevent further strife.

Bill Stewart, Chairman of W.P. Stewart & Co. and one of the finest money managers of the past 40 years according to Prissert, had this to say about Anatomy of the Meltdown 1998-2008.

"Franck's work puts the past decade into bold relief, reminding us of how the worst market in most of our lifetimes came to be. His points are well made and nicely documented. This should help all of us to better understand the present investment climate - a necessary precursor to forecasting the next step. This is a nice read providing valuable investment perspective."

Anatomy of the Meltdown 1998-2008: The Worst Decade in Stock Investing, or Was It? is available for sale online at Amazon.com, BookSurge.com and through additional retail chains worldwide.

MISCELLANEOUS - Investors Brushing Off Key Lessons from Financial Crisis

Old Habits Die Hard: Surveyed investors have made no adjustments to their visions of a comfortable retirement…

• 78% of investors expect their standard of living in retirement to be the same or better than it is now
• 80% believe they have planned for the future and are confident they will have a secure retirement

…and once again are depending on strong stock returns to fund these retirement dreams

• Nearly half of investors (48%) continue to rely on equities as the foundation of their retirement portfolios
• 74% say it is likely the stock market “will bounce back and restore” any portfolio losses
• Overall, respondents believe a 9% annual mean return is a reasonable expectation for retirement planning

LINK TO FULL ARTICLE: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090921005374&newsLang=en

PERSONNEL CHANGES - Anne Arvia to Lead Nationwide's Retirement Plans Business

COLUMBUS, Ohio--(BUSINESS WIRE)--Nationwide Financial Services, Inc. today announced that Anne Arvia, president of Nationwide Bank, has been selected as the new leader for Nationwide’s retirement plans business effective November 1, 2009. Arvia will replace William S. Jackson, senior vice president for retirement plans, who recently announced his plan to retire at year-end after 25 years with the company.

Since launching the bank, Arvia has successfully spearheaded a strategy that has resulted in the accumulation of more than $2.7 billion in assets in just two short years. By capitalizing on the breadth of its Nationwide Mutual parent company, growth for the bank has been a direct result of leveraging existing customer relationships across the insurance and financial services businesses and reaching new customers from a unique market position of capital strength and liquidity.

“During her time at Nationwide, I have been impressed by Anne’s leadership, integrity and proven ability to successfully develop and execute business strategies,” said Mark R. Thresher, president and COO of Nationwide Financial. “Her deep knowledge of financial services and experience navigating the challenges of a rapidly changing industry will be instrumental to strengthening our competitive position in the retirement plans market.”

Arvia’s leadership during the financial markets crisis was most recently recognized by US Banker, which just last week named her one of the “25 Most Powerful Women in Banking” a recognition she also received in 2005. She was also featured as one of the “100 Most Influential Women,” by Crain’s Chicago Business’ and was named to the publication’s “Forty Under 40.”

“I’m extremely proud of what we’ve accomplished at Nationwide Bank over the past several years and I am looking forward to taking on a new challenge,” said Arvia. “I’m excited to lead this business at a time when there is such great opportunity to help the many Americans who are concerned about their financial future and are looking for help growing and managing their retirement assets.”

PERSONNEL CHANGES - Liam E. McGee Named Chairman and CEO of The Hartford

Brings a proven track record of successfully managing large, complex financial services organizations to lead The Hartford into its third century; Led Bank of America’s Consumer and Small Business Bank, the nation’s largest retail bank, serving more than 50 million households and small businesses

HARTFORD, Conn.--(BUSINESS WIRE)--The Hartford Financial Services Group, Inc. (NYSE: HIG) announced today that Liam E. McGee has been appointed Chairman of the Board of Directors and Chief Executive Officer, effective October 1, 2009. Until recently, McGee was President of the Consumer and Small Business Bank for Bank of America Corporation (NYSE: BAC) where he operated the nation’s largest retail bank, serving more than 50 million consumer households and small businesses with over 6,100 domestic banking centers, nearly 100,000 employees and the nation’s largest online and mobile bank.

“Liam’s strong track record of success in leading large, complex financial services organizations makes him the ideal person to build on The Hartford’s strong foundation,” said Michael G. Morris, The Hartford’s presiding director. “He has an outstanding combination of leadership skills, financial acumen and operational and technology experience, along with a demonstrated ability to evolve and profitably grow businesses in response to changing business environments and customer needs. We welcome Liam to The Hartford and look forward to working with him as he leads the company into its third century.”

McGee stated, “The Hartford has a strong brand that has been associated with trust and integrity for 200 years, great business franchises, a talented team of employees, and enduring relationships with distribution partners. In an environment of intense competition, technological innovation and changing consumer and business behavior, there are clear opportunities to create competitive advantages. By leveraging and building on The Hartford’s strengths, we will enter our third century as an industry leader, well positioned to achieve the expectations of our customers, shareholders, partners and employees.”

McGee succeeds Ramani Ayer, who in June announced his intention to retire from the Company. Ayer will resign as Chairman and CEO effective October 1, 2009 and will retire on November 1, 2009, following a brief transition period. Ayer has served as Chairman and CEO of The Hartford since February 1997 and has spent his entire career serving the company.

Commenting on the announcement, Ayer said, “Liam is a proven leader in the financial services industry with an outstanding set of skills, a deep appreciation of balancing risk and return, and broad experience in a variety of financial businesses. He also shares The Hartford’s values, including product and customer service excellence, integrity, and a commitment to giving back to the communities in which we operate. I look forward to working with Liam to ensure a smooth transition.”

“Ramani’s deep industry experience, integrity, and strong leadership skills have been instrumental to the success of The Hartford over the course of his 36-year career with the company,” added Morris. “We are grateful for the contributions he has made and for his continuing dedication to The Hartford. On behalf of the Board and our 29,000 employees, I sincerely thank Ramani for his lifetime of service to – and his distinguished leadership of – The Hartford.”

PERSONNEL CHANGES - UBS Investment Bank Hires Michael Ostow

as Managing Director and Head of North American Insurance Banking

NEW YORK--(BUSINESS WIRE)--UBS Investment Bank today announced that Michael Ostow will join its Investment Banking Department (IBD) as a Managing Director and Head of North American Insurance. He will be based in New York and report jointly to Gary Howe and Halle Benett, Americas Co-Heads of the Financial Institutions Group (FIG).

“Two years after the start of the financial crisis, financial institutions continue to face unprecedented challenges, which have led to a high volume of transactions, from capital raising to restructuring to M&A,” said Howe. “The addition of Michael to lead our insurance effort in North America will strengthen our coverage of this important sector.”

Ostow, 41, will join UBS from Morgan Stanley, where he was most recently Co-Head of the North American Insurance Group within its FIG practice. Previously, he was a Managing Director in the FIG practice at Credit Suisse, where he had coverage responsibilities for insurance companies. Early in his career, Ostow was an associate in the FIG practice at UBS in New York.

“The insurance sector is currently undergoing enormous change, and we are seeing a significant pipeline of insurance-related transactions,” said Benett. “Michael brings enormous experience in insurance and every type of transaction, and I am confident he will add significantly to our ability to provide our clients with superior advice and execution.”

Ostow holds a BS from the Wharton School at the University of Pennsylvania and an MBA from Columbia Business School.

RESEARCH - Finance Execs Plan Changes to Retirement Plans to Reduce Risk...

and Provide Employees with a More Secure Retirement

CFO Research/PRU survey finds that most finance executives want defined contribution plans to more closely resemble defined benefit plans.

NEWARK, N.J.--(BUSINESS WIRE)--Nearly half of senior finance executives said in a recent survey that their companies are very or somewhat likely to freeze or terminate their defined benefit retirement plans in the next two years. However, more than two-thirds of the surveyed executives said that they would like their defined contribution plans to more closely resemble DB plans through the addition of features such as guaranteed income during retirement, according to the results of a recent survey by CFO Research Services and Prudential Financial, Inc. (NYSE:PRU).

LINK TO FULL ARTICLE: http://www.insurancenewsnet.com/article.asp?n=1&innID=x8dn8jftzgfckcmfsvmf6sxqtmvshfiszp-t94qkrhqonptdukdtymeeiy7gkqb7

RESEARCH - Global Financial Crisis Drives New Attitude

About Investing And Asset Allocation In America

New survey from The Hartford shows investors are ready to take a fresh look at diversification, but are unsure where to start

SIMSBURY, Conn.--(BUSINESS WIRE)--The Hartford Mutual Funds today announced the results of a new survey examining the change in Americans’ mood on investing as a result of the global financial crisis. Findings reveal Americans are less confident and more conservative about their personal finances than they were a year ago. Most notably, U.S. investors are open to fresh approaches to asset allocation but are confused about the investments they hold and lack knowledge about how their portfolios are allocated. The survey of 530 individual investors who work with financial advisors found a much different American investor than a year ago:

• Nearly 50 percent are less confident about their financial picture and 41 percent feel less confident about the market.
• Fifty-three percent are more invested in bonds or cash and more than half admit they are just trying to protect what they have left.
• Nearly 70 percent of investors are taking a “wait and see” approach to investing, despite the recent market rally.

RESEARCH - Non-Life Margins Under Pressure, Despite Rate Increases

OLDWICK, N.J.--(BUSINESS WIRE)--Last year was the most difficult in recent history for the global economy. What started as a crisis in U.S. subprime mortgages quickly spread through the global banking system and the broader financial system, causing credit markets to close. Governments were forced to take action to support failing banks amid falling equity markets. World economies, including that of the United Kingdom, fell into recession.

In view of the challenging operating environment, the U.K. non-life insurance market performed well in 2008. The absence of large weather-related losses and positive prior-year development led to improved overall underwriting performance compared with 2007. In addition, the cautious investment strategies of the majority of market participants provided some protection against the large declines in equity and bond markets.

LINK TO FULL ARTICLE: http://www.google.com/search?q=A.M.+Best+Special+Report%3A+Non-Life+Margins+Under+Pressure%2C+Despite+Rate+Increases&rls=com.microsoft:en-us:IE-SearchBox&ie=UTF-8&oe=UTF-8&sourceid=ie7&rlz=1I7RNWE_en

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