I
f a bank with growth ambitions is looking to enter a market with a need, Manhattan might not seem at first glance like the place to go. It is certainly not lacking for banks. But Republic Bank, based in the Philadelphia/New Jersey market, sees Manhattan as more than just the sum of its banks. Before making the decision to open its first Manhattan outpost, Republic looked at the level of customer service and assessed the likely consumer satisfaction level. The verdict? Manhattan may have a lot of banks, but it doesn’t have a lot of banks that excel at customer service. And to Republic, whose “Power of Red” tagline is heavily themed on customer service, that meant opportunity. “We have people waiting in lines to come in,” claimed Republic Bank CEO Harry Madonna. “People on social media let other people know we’re open, and we see that happening all the time. It doesn’t require the kind of mass advertising you see from big banks.” Madonna said Republic sees itself in many ways as a successor to Commerce Bank, which was sold to TD Bank more than a decade ago. There are plenty of reasons for that association, and the biggest is the fact that former Commerce Bank CEO Vernon Hill is a major investor and chairman of Republic’s board. And Republic’s first Manhattan branch is in the same location where Commerce once operated, which is one of the reasons Madonna sees a natural constituency in the form of former Commerce customers. “If you think about it, we’re following in the old Commerce footsteps,” Madonna said. “We’ve got a lot of customers who used to be Commerce customers saying, ‘When are you coming?’ We thought we’d make the leap into New York and we could fill in North Jersey and Long Island as part of the plan.” It starts in Manhattan, though, where Madonna says bigger banks have lost their appreciation for personal service amidst the rise of digital apps and so forth. He noted that TD used to have coin counters available for customers in their lobby, and claims now when you walk in they are covered. “New York has gotten kind of fat on their old ways,” Madonna said. “They’ve slipped back to high fees, less customer service, cutting costs. If you drive around, you see offices close. I laugh.” TD Bank asserts its customer service levels are exemplary. “TD Bank is renowned for our outstanding
customer service and retail products that meet the evolving needs and preferences of our customers in New York City and across our footprint, which is why Kiplinger recently ranked TD as the Best National Bank in the U.S. for the third year in a row and Money picked TD as the Best Bank for Seniors for the second consecutive year. TD has a strong, deeply rooted connection with the diverse communities that we serve across New York City, where we’re committed to delivering unexpectedly human service to thousands of loyal retail customers at our 141 TD Bank stores, virtually all of which are open seven days a week for everyone’s convenience,” said Matthew J. Doherty, vice president, corporate communications manager| corporate and public affairs, at TD Bank. Bruce Paul, CEO of Customer Experience Solutions LLC, said his group’s research backs up Madonna’s sense of the market and issues with customer satisfaction. Citing the New York Banking Benchmarks, Paul said Republic should be able to capitalize on clients’ concerns if it excels in customer service as Madonna vows it will. “We’ve interviewed hundreds of thousands of people about their banking experiences,” Paul said. “About 33 percent of them in Manhattan are unhappy with their bank. So, there’s a lot of opportunity.” Paul said his team’s calculations put the number of Manhattan bank customers ready to switch to a bank with better customer service at about 247,000. Of course, some existing Manhattan banks are better than others at customer service. “The percentage of vulnerable customers varies widely by institution,” Paul said. “There are some that have a relatively high percentage like Santander, HSBC and NY Commercial Bank. On the other hand, there are others that have much lower levels of vulnerability like Chase, Amalgamated and TD. New entrants like Republic could gain decent market share if they target vulnerable customers with the right marketing message.” Republic currently has about $3 billion in assets, Madonna said. The bank is not publicly targeting a specific growth figure going forward but is seeking to open about seven new branches per year – although that requires exploration of as many as 15 per year because not all of them will come to fruition. “A lot depends on what happens in New York,” Madonna said. “If New York takes off the way we think it will, with the size of deposit growth we see, in two
An estimated
247,000
customers are ready to switch to a bank with better customer service.
August 2019 | BANKING MID ATLANTIC
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