Helping A Little BITS At A Time

From a humble start as a trainee at PNC's management development program in 1972, James Rohr has gone on to become the Pittsburgh-based bank's chairman and chief executive officer.

Despite his many business responsibilities, Rohr has taken an active role in Pittsburgh's civic arena, becoming director of Carnegie Mellon University and chairman of the Pittsburgh Cultural Trust. His bank also played a part in creating a new venue for the Pittsburgh Pirates, who now play ball at PNC Park.

Now, Rohr will serve a two-year term as chairman of BITS, the technology arm of the Financial Services Roundtable. He comes well-equipped for the job. PNC has always shown a penchant for technology, as evidenced by its capture of the 26th spot on InformationWeek's survey of IT innovators, the highest ranking of any bank.

In a conversation with BS&T senior associate editor Ivan Schneider, Rohr spoke about new initiatives and best practices at BITS and PNC.

BS&T: Tell me about your new role at BITS.

ROHR: Technology is critical to each and every one of our businesses. Take fraud detection. If you look at where we are after the tragedy of last year, obviously fraud detection is a much bigger issue than it was before. Fraud detection costs the industry a huge amount of money every year. $12-13 billion, according to BITS. That's a number that all of us need to be interested in. The other thing is that there are best practices that we share that enhance our ability to detect fraud.

BS&T: What other types of best practices are being shared?

ROHR: Some of the trends with the IT service providers, where some of it's being done offshore today, for example. That's an experience that's shared and that everyone should have.

In payment strategies, there are cost issues to leverage the infrastructure of the industry to use electronic payments that are more convenient. Then you've got things like authentication. With the growth of e-commerce, clearly it helps everybody with security risk and crisis management.

BS&T: How do you rate the industry's response to September 11th?

ROHR: As an industry, I think we did very well. The payments system maintained itself, and the vast majority of the backup systems were tested and worked. The security and survivability of the financial services industry was proven to be pretty good. Banks have been sharing the experiences across the industry so that we learn where we weren't as good as we thought we were.

There's room for improvement on the communications side, where BITS was very helpful in terms of being a vehicle for the CEOs to communicate collectively as to where we were.

BS&T: What technology initiatives are underway at PNC?

ROHR: We have Web-enabled all of our branches. So we have a single customer database that runs off a single data center. We have the single largest penetration in the industry of online customers as a percent of our total retail customers. Whether you're touching us online, at the ATM, in the branch or in our call center, everybody has the same information and understands the most recent contacts you've had with any part of the company.

Our ability to enhance customer satisfaction, which is now at an all-time high for us, really is about seamless customer service, whether you're utilizing the branch or any other form of technology. The branch now, because we've Web-enabled all the branches, is really just a part of our technology.

BS&T: What kind of ancillary products and services are you able to offer to your customers?

ROHR: We have the ability to cross-sell a whole series of other products. Whether it be loans, mortgages, credit cards or referring people to our investment products, it works exceedingly well. It's gotten to the point now where 30% of our revenue in the branch bank, the regional community bank as we call it, is fees. So they've been very, very successful in cross-selling other products. We have a ways to go, but we clearly have made a lot of progress in that area.

BS&T: What are your expectations for the industry as a whole?

ROHR: I'm optimistic about the industry. We're at the tail end of a recession, and we've weathered it rather well. When you throw in the terrorist attacks, I think the industry's been very responsive, and has done well throughout this difficult economic period. I think we're going to see a gradually-improving economy, and the banks should do well in that type of environment.

Banks are focused on the customer better than they have been before, and that includes not only servicing the customer, but also knowing the customer. That's better for risk management, because the better you know your customer, the better you're able to control the risks around the customer.