KeyBank 2014 Annual Report Download - page 38

We operate in a highly competitive industry.
We face substantial competition in all areas of our operations from a variety of competitors, some of which are
larger and may have more financial resources than us. Our competitors primarily include national and super-
regional banks as well as smaller community banks within the various geographic regions in which we operate.
We also face competition from many other types of financial institutions, including, without limitation, savings
associations, credit unions, mortgage banking companies, finance companies, mutual funds, insurance
companies, investment management firms, investment banking firms, broker-dealers and other local, regional,
national, and global financial services firms. In addition, technology has lowered barriers to entry and made it
possible for nonbanks to offer products and services traditionally provided by banks. Mergers and acquisitions
have led to increased concentration in the banking industry, placing added competitive pressure on Key’s core
banking products and services. We expect the competitive landscape of the financial services industry to become
even more intensified as a result of legislative, regulatory, structural and technological changes.
Our ability to compete successfully depends on a number of factors, including: our ability to develop and execute
strategic plans and initiatives; our ability to develop, maintain and build long-term customer relationships based
on quality service and competitive prices; our ability to develop competitive products and technologies
demanded by our customers, maintaining our high ethical standards and safe and sound assets; and industry and
general economic trends. Increased competition in the financial services industry, and our failure to perform in
any of these areas, could significantly weaken our competitive position, which could adversely affect our growth
and profitability.
Maintaining or increasing our market share depends upon our ability to adapt our products and services
to evolving industry standards and consumer preferences, while maintaining competitive prices.
The continuous, widespread adoption of new technologies, including internet services and mobile devices
(including smartphones and tablets), requires us to evaluate our product and service offerings to ensure they
remain competitive. Our success depends, in part, on our ability to adapt our products and services, as well as our
distribution of them, to evolving industry standards and consumer preferences. New technologies have altered
consumer behavior by allowing consumers to complete transactions such as paying bills or transferring funds
directly without the assistance of banks. New products allow consumers to maintain funds in brokerage accounts
or mutual funds that would have historically been held as bank deposits. The process of eliminating banks as
intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of
customer deposits and related income generated from those deposits.
The increasing pressure from our competitors, both bank and nonbank, to keep pace and adopt new technologies
and products and services requires us to incur substantial expense. We may be unsuccessful in developing or
introducing new products and services, modifying our existing products and services, adapting to changing
consumer preferences and spending and saving habits, achieving market acceptance or regulatory approval,
sufficiently developing or maintaining a loyal customer base or offering products and services at prices lower
than the prices offered by our competitors. These risks may affect our ability to achieve growth in our market
share and could reduce both our revenue streams from certain products and services and our revenues from our
net interest income.
We may not be able to attract and retain skilled people.
Our success depends, in large part, on our ability to attract, retain, motivate, and develop key people.
Competition for the best people in most of our business activities is ongoing and can be intense, and we may not
be able to retain or hire the people we want or need to serve our customers. To attract and retain qualified
employees, we must compensate these employees at market levels. Typically, those levels have caused employee
compensation to be our greatest expense.
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