Changes In Banking Good For Commercial Customers

May 15, 2002
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HOLLAND — A drastic change in the banking landscape over the past half-decade that has brought numerous new players to the market has been nothing but good for commercial customers who now have far more options to consider, a long-time veteran of the local banking market says.

The movement of large regional banks into the Holland-Zeeland banking market through acquisitions, combined with the resulting formation and migration of aggressive smaller competitors, has generated intense competition locally that only benefits businesses, Doug Iverson, a local executive vice president for Fifth Third Bank, said last week during an address to members of the Holland Area Chamber of Commerce.

“Never has there been a better time to get what you need to make sure your business prospers,” Iverson said during the chamber’s monthly Early Bird Breakfast held May 3. “We see it here in our market. It’s become something that works to your benefit because we compete for your dollars.”

Iverson, a 30-year veteran of the local banking market and former CEO of Ottawa Financial Corp., acquired by Fifth Third in September of 2000, traced the present environment to the banking industry’s deregulation in the 1980s, which led to a nationwide wave of bank mergers and consolidations during the 1990s.

That wave came to Holland in 1996 when Huntington Bancshares bought the former FMB Corp. of Zeeland. A year later, National City Corp. bought the former First of America Corp. in Kalamazoo. Then came Fifth Third’s buyout last year of Grand Rapids-based Old Kent Financial Corp.

The acquisition of the three former market leaders by larger banks led to an opening in the market for smaller, niche players. Most notable was the formation in late 1997 of Macatawa Bank Corp., which now stakes claim to about 18 percent of the local banking market, and The Bank of Holland in 1998.

Other smaller banks, seeing the same opportunity to play off the mergers that created larger players, also moved into the market, including Byron Center State Bank, Bloomfield Hills-based Flagstar Bank, and Republic Bank. Chemical Bank came to town last year when it bought branches that Fifth Third had to divest following its acquisition of Old Kent and Ottawa Financial, the parent company of the former AmeriBank.

Yet despite that change in the landscape, as well as the advent of technology that enables customers to do their banking through a variety of means and the transitioning of banks into financial-service companies that offer insurance and brokerage services, the need to provide customers a high level of personal service remains paramount, Iverson said.

The “high-tech, high-touch” trend forces banks to play a delicate balance between providing the technology that customers want in order to make it more convenient to do their banking with the personal service they expect and demand, Iverson said. With the increased competition in the market, personal service is as important as ever, he said.

“Some things don’t change,” Iverson said. “It is certainly an interesting challenge we have in trying to meet both of those definitions.”

In that respect, Iverson told chamber members that they should expect good personal service from their commercial banker. If they don’t get it, businesses now have plenty of options from which to choose.

“Don’t work with a banker who isn’t willing to understand who you are, what you are and where you’re headed,” Iverson said. “You need to see us as your partner. Our interests are aligned. Not only do we want to succeed in business, but we want you to succeed as well.”  

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