mbanx Case Study
In 1996 Bank of Montreal launched mbanx - a virtual bank with no branches. Shortly afterwards, BancOne in the US created Wingspan with a similar model. Primary access was online and telephone. What was different, was that employees were seconded, voluntarily from across the country, without knowing for sure where they were going; just that it was new innovative and exciting.

Everything folowed the values outlined below. Everyone is important referred to customers and employees - everyone was empowered. A promise is a promise meant whatever was said to a customer must be followed through, and this led to employees going to extraordinary lengths to satisfy customers, including meeting them personally after work, which for a call centre is unheard of.

Banking is always viewed as too complicated, so we had one bank account, with no rules. Unlimited transactions, and unlimited ATM access.

Anyhow, the value proposition was so powerful, 100% of employees were behind the concept, and after launch October 16th, 1996, customers who joined mbanx were wowed.

And it didnt stop there. We had a promise to deliver innovation every month, and that innovation was always product and service based. New features online, new products, and new enhancements to simplify even more. There was no traditional product or marketing department. The new services, products, enhancements were all designed by one organisational group, that was in essence the strategy and implementation engine for mbanx. As part of that group we were continually speaking with the call centre managers (deliberately not agents) and with employees via email, to get everything right, and deliver on the monthly enhancements.

It was a powerful combination, that highlighted the power of everyone focused on one vision, and having continual conversations in an atmosphere of openness. While mbanx was eventually folded into the larger bank, for financial reasons, that in no way detracts from the learning noted here. Those reasons were tied to the affordability, and inherent inefficiency of trying to run parallel banks within one bank. The simple fact remains that the model produced loyal customers, willing to do more business with mbanx.

Lessons on what worked:

• simplicity, convenience, and a compelling common message make all employees ambassadors
• simplicity, convenience, and a compelling common message make all customers ambassadors

There are some clues here for what Pinkomarketing can achieve, and how it can be implemented in a large corporation. Also lessons in how not to do it.

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BACKGROUND INFORMATION:
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Article online

Launched in 1996, mbanx was born out of the realization that electronic access channels should not undermine client service. The business is a full service bank that uses technology to facilitate client relationships and enable superior service. Mbanx has the highest client satisfaction rating of any financial institution in North America, proving e-commerce is smart business. The mbanx experience also exemplifies that there are compelling business reasons for doing things which also benefit the environment.

VALUES PAY OFF. mbanx operates with community building values. These values benefit both clients and employees, and bring both economic and environmental benefits. For example, electronic banking and retail partnerships benefit clients while rendering business efficiencies. But these business efficiencies also mean less car travel and hence a reduction in fossil fuel emissions, less infrastructure expenditure and hence opportunities for more progressive land use development, etc. Another example of multiple benefits is how mbanx has catered to employee workplace preferences. To make mbanx an attractive place to work, offices were located near universities and on public transit routes, in downtown Toronto and downtown Montreal. Office environments share natural light, offer spacious work spaces, and serve healthy juice and fruit at meetings. These characteristics help mbanx attract the best and the brightest people, and they carry environmental benefits.

CHALLENGES. Electric stoves used to be called a technology because technology is another word for something in transition. When dealing with huge legacy systems, incompatible protocols, and a society that has not fully accepted the electronic model, challenges remain constant. An example of this are the 6,000 pieces of mail mbanx receives per day, most of which are signed original client forms still required by regulators. However, mbanx continues to pioneer in the e-commerce field and its overall strategy has proven an advantage.

Canadian Business magazine recently estimated that e-commerce will reach US$2.5 trillion in consumer and business transactions by the year 2000. Virtual banking is one of the more successful applications of the e-business model.

Notes from the Banks annual report, and other publicly available information on results:

mbanxTM = change is good
In October 1996, Bank of Montreal created mbanx, the first direct bank in Canada, and launched a new era in consumer banking. mbanx is the creative marriage of people and technology, harnessed to produce banking free from the boundaries traditionally imposed by time and space.

Through mbanx, Bank of Montreal customers can enjoy a new, broader level of banking services delivered with unprecedented flexibility and convenience.

At the heart of mbanx are five core values:
a promise is a promise;
everyone is important;
change is good;
simple rules that work; and
we believe in better.

Together with product innovation, such as offering for the first time mortgages through the Internet, the mbanx brand has received outstanding recognition in the marketplace. With more than 80,000 customers to date, mbanx has met or exceeded our customers’ expectations, having placed in the top decile in customer loyalty rankings of financial services surveyed by an independent research firm.

mbanx is definitive proof that Bank of Montreal can create and implement a dramatically new and
different vision of banking in the Digital Age.

What worked:
*clear vision
*values based sales culture
*remote relationship mgmt
*progressive measurement & monitoring of results
*on-going learning
*creativity/innovation

Results:
*new national brand successfully created
*Brand recognition exceeded all Canadian FI’s
*40% recall amongst Cdns consumers
*exceptional customer commitment achieved
*#1 in Customer satisfaction amongst Cdn FI’s and on a par with top of all industry achievers
*surpassed Revenue/client expectation - 10 – 15 times that achieved in the regular Bank
*a culture that celebrated outstanding sales/service
*First bank to make culture not just a priority but recognize as a competitive differentiator
*personal relationships in non face to face environment developed
*Proved that relationship management succeeds in a virtual environment

mbanx principles:
*Change is good
*We believe in better
*A promise is a promise
*Simple rules that work
*Everyone is important

Value Proposition:
*Access to a team of personal portfolio managers 24/7/365
*Rewards program encourages clients to consolidate business
*Money-back guarantee
*Backed by the security and convenience of branch system

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