WBA exec sees consolidation, other changes ahead

Northwestern Financial Review, Jul 1-Jul 14, 2002

The number of banks in Wisconsin will decline to 200 by 2012 from 350 today, predicts Harry Argue, the executive vice president and CEO of the Wisconsin Bankers Association. At the request of the WBA board of directors, Argue made several predictions about the state of the banking industry in 10 years.

Total assets in Wisconsin's banks will increase to $180 billion from $100 billion today, with 85 percent of those assets in banks with national charters. At least six Wisconsin banks will have $2 billion in assets or more, Argue said. Currently, only three Wisconsin-based bank holding companies have $2 billion in assets or more.

As for the association, Argue predicts the Wisconsin Bankers Association will own subsidiaries offering services related to marketing, real estate, advertising and data processing. He also said the association will handle the administration of family-- owned bank charitable foundations. He said members will continue to rely on the association for legal support, necessitating an increase in the size of its legal staff.

Argue said that although WBA will work more closely with other state banking groups in the region, each state will retain its own bank trade group. He also predicted that WBA membership would be expanded to include insurance firms, corporate lenders, mortgage brokers and financial planners.

"Insured depository financial institutions will continue to lose traditional market share within the state to less regulated purveyors of financial services," Argue said. To remain competitive and to meet customers' needs, retail bankers will require ongoing education in financial planning areas, he said. As mid-America becomes more affluent, customers will increasingly require more retirement, estate, insurance and investment services from their banks.

In addition, Argue foresees that nearly all WBA member banks in 2012 will use "very smart ATMs. These machines will be activated by voice with a recognition system that determines, by visually scanning the customer, his or her identity.

"ATMs will have surpassed the branch system as the highest volume domestic banking channel. Web-- based ATMs will provide high-value transactions such as check cashing, wire transfers, event ticketing and e-- commerce shopping," Argue said.

Today, 25 million people bank online, Argue said. By 2012, Argue envisions many people will use their televisions to access their accounts and pay bills. Bank customers will take advantage of portable devices such as hand-held miniature personal computers to gain instant access to their bank accounts. However, a major share of the customer base will still do their banking the traditional way, using a brick and mortar branch.

Argue described his expectations for WBA during the next decade as ambitious. "As long as I remain WBA's CEO," said Argue, "while I do not ever want to see a project fail, I will accept that far sooner than not doing something in an innovative manner."