Bank of Montreal 2013 Annual Report Download - page 6

CHIEF EXECUTIVE OFFICER’S MESSAGE
Bill Downe at the BMO Company Meeting, May 2013.
communications and instant access to information,
they assume an immediate response to their transactional
needs is always within reach. And as we in turn work
alongside them to help bring their financial goals within
reach, they want to see regular confirmation of the
value we add.
To deliver on these expectations, we’re asking more of
ourselves – and more of our bank.
There are big things going
on in our industry.
To say the changes underway around us are profound
isn’t an overstatement.
Profit models are changing across our industry, redefining
the drivers of success. Simultaneous shifts in consumer
behaviour and levels of regulatory engagement call for a
broad change agenda that speaks to both the growth of
revenue and the management of expense. There is a
premium on superb execution, on innovation and on agility
in delivering strong, consolidated financial performance.
The pace of change is very rapid for us all.
We take pride in the quality of the products and services
BMO offers to customers – they are the financial building
blocks of peace of mind: the control of spending, the
growth of savings, the prudent use of credit and wise
investment. We also care greatly about the way in which
customers experience our bank: responsiveness and
attention are what build trust and confidence for all customer
8 BMO Financial Group 196th Annual Report 2013
segments. But in an era of rapid social, technological and
economic change, we remain intensely focused on the
reason why our customers continue to look for our guidance
and support in controlling their financial futures. This is
something that goes far beyond convenience and product
features. It is why our bankers are so committed to the
work they do.
And we’re all confident it can be done better.
We’re confident in our ability to thrive in this period of
rapid change, because we’ve been steadily deepening our
long-standing focus on customers, building the capabilities
that grow loyalty and advocacy.
The forces of change
Against the broader backdrop of change, our efforts going
forward will be shaped by two significant forces:
• Customers’ growing appetite for personalized service,
in the moment. When someone has an experience that
is simpler or perfectly tailored to their needs in one area
of life, it influences their expectations in all other areas.
In a modern world, customers’ expectations of their bank
are being revised daily.
• An unprecedented level of regulatory engagement.
Around the globe, governments and supervisors are
introducing rigorous reporting requirements against
constantly evolving standards. To continue meeting them,
we must securely analyze highly complex data in real
time while simplifying the work of the bankers who are
responsible for understanding it. As we maintain this
balance, we’re guided by a long-held belief that what
matters more than any one rule is the larger reason
behind it. Effective regulation ensures integrity and
strengthens trust – principles that are vital to our success
as a business and have been ingrained in our values for
nearly 200 years.
In some ways these forces seem to operate in opposition
to one another. But we have confidence in our ability to
respond fully in each of the market segments we serve, and
to resolve the natural tension between simplifying the lives
of our customers and maintaining confidence in a financial
system that thrives in dealing with complex assignments.
Intensifying our efforts
In our four principal business groups we are meeting
the challenge of rising expectations. We know that in
making processes more efficient or services more accessible,
we create more opportunities for our employees to have
meaningful conversations with customers about their
financial goals, delivering the unique value that differentiates
our bank from our competitors.
Personal and Commercial Banking finished the year
with very good momentum, reflecting the competitiveness
of BMO’s position in the markets we serve. In Canada,
where our commercial lending market share is close to
20%, we saw good balance growth: 12% in deposits
and 11% in loans. In personal banking we again led the
market with our emphasis on shorter-amortization,
fixed-rate mortgages.
In the U.S., mid-market commercial lending continued to
gain strength while initiatives targeted toward small business
customers gained traction. In U.S. retail banking we are
accelerating the move to digital fulfillment and sales while
increasing the investment in technology that supports
efficiency and growth.
BMO Capital Markets continued to demonstrate the simple
truth that a quality book of business generates quality
returns. We earned an 18.9% return on equity and were
named Best Investment Bank in Canada by Global Finance
magazine, and our strengthened U.S. business showed good
growth and improving operating leverage.
Wealth Management at BMO is distinguished by a superior
offering across multiple dimensions, from private banking
and asset management to brokerage and insurance. Market
momentum, growth created by changing demographics
and disciplined investment all support the accelerating
expansion of our wealth business.
Over the last decade, the bank has maintained strong
momentum in the compound growth rate of both revenue
and net income – 6% and 9%, respectively. With record
reported results in 2013 and the highest Basel III common
equity tier 1 ratio of the Canadian banks, BMO is well
positioned to capitalize on the opportunities ahead. We are
intensifying our pursuit of BMO’s five strategic priorities
(outlined on page 4) by focusing specifically in these areas:
• Extending the digital experience across all channels.
We’re developing strategies to further integrate the bank’s
digital and physical channels – merging the online and
mobile experience into our retail branch and ATM
network. U.S. households actively using BMO mobile
banking increased 60% in 2013.
• Simplifying and automating for greater efficiency.
By exploring new ways to streamline processes, modernize
platforms and embed cost controls, we’re adding to
the productivity and efficiency gains realized over the past
two years.
• Leveraging data insights to serve customers better.
By enhancing the bank’s analytics capabilities, we’re
sharpening our understanding of what customers
are looking for, how they want to do business with
us and, most importantly, why they need our help.
At BMO’s Meadowvale Customer Contact Centre, we pay close attention
to what’s on customers’ minds.
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