For the nation's banks, facing heavy competition from nonbanks like Merrill Lynch and Sears, one way to enter the battle seems to be to put on a different suit of armor and ride under a new banner. Or, at least, another name may help.
Since the 1930s, the banks' best protection came from federal law, specifically the Glass-Steagall Act, passed in 1933 and intended to forever erect a wall between banking and the securities business. Simply put, it meant banks could not sell stocks and brokers could not take deposits.
Now Congress is debating whether to break down the Glass-Steagall wall. But the financial-services industry isn't waiting. Through brokerage subsidaries or partnerships with brokers, banks and savings and loans are selling stocks. And with their money market funds and asset-management accounts, brokerages are taking deposits, as well as writing loans and issuing insurance.
So if a bank wants to compete in this new environment, it not only has to think of new ways of doing business, it has to seek a new identity as well.
The Fleet Financial Group in Providence is but one example of many larger banks around the country that are doing just that. One way to see how Fleet has evolved over the years is to look at its name. Fleet's name-changing history is typical of many US banks. When it was founded in 1791, Providence Bank served nicely as a name. A couple of mergers and 163 years later, it became the Industrial National Bank in 1954, though still under the charter of the Providence National Bank.
In 1962, it was renamed Industrial National Bank of Rhode Island; in 1968, it became the principal subsidiary of Industrial Bancorp Inc., a bank holding company. That name was changed to Industrial National Corporation in 1970.
Finally, on April 14, 1982, the bank's board of directors approved the latest change to Fleet Financial Group Inc.; Industrial National Bank, its principal subsidiary, became Fleet National Bank the following September.
All these name changes, particularly the last one, are not merely cosmetic, says Peter L. Hood, Fleet's executive vice-president for products and services. The search for a new name had a two-fold purpose, he says. First, ''being contemporay, we're not just a bank anymore, but a financial conglomerate, if you will. Second, in anticipation of interstate banking, we wanted a name that would be less confusing, one that would work well all over the United States.''
The bank officers liked the name ''Fleet,'' he added, because it conjures up the region's sailing history. Also, as an adjective, it stood for speed and swiftness, qualities the bank hopes to maintain, as well the rate of expected changes in the future.
''This will help us to diversify and grow into new types of businesses,'' Mr. Hood said. ''Also, we wanted to be recognized as a solid regional bank. . . . Frankly, Industrial National didn't mean too much. It sounded like a cement company.''
While Fleet Financial is not getting into the cement busines, it, like many other banks and savings and loan institutions, is getting into areas once considered forbidden territory by this industry.
Today, Fleet has over 200 offices in 26 states and six foreign countries. In July, it began offering a discount brokerage service through its trust department. At savings of up to 70 percent over full-service brokerages, Fleet customers can buy and sell stocks, buy securities on margin, and have safekeeping of their stock certificates. What they won't get is advice; they will have to do their own research.
For more-well-to-do Fleet customers, the bank has also introduced its answer to the asset-management account, pioneered by Merrill Lynch with its Cash Management Account and adapted by most major brokerages since. Called 100 Westminster (named for the bank's original address in Providence), this account lets customers move money among the bank's various accounts, in and out of stock purchases, and into a money fund.
Recently, Mr. Hood says, the bank started franchising the 100 Westminster account to other banks that cannot afford to set up similar accounts of their own or just want to save the expense of putting together the paperwork and computer software.
In another expansion move, Fleet earlier this year bought Credico Financial Inc., a consumer-finance company based in New Jersey. The deal, worth approximately $163 million, gives Fleet several typical small-loan offices, as well as second-mortgage offices in such states as California, New Jersey, Connecticut, and Virginia. The company also has a mortgage-lending subsidiary in Milwaukee, in addition to one in Providence.
Further, Fleet has loan-production offices in four states, the latest serving an area from Hartford, Conn., to Springfield, Mass.
For the future, Mr. Hood says, the bank is looking forward to the possibility of interstate banking. The implication is that Fleet will be looking for smaller banks to acquire in other states. But some analysts believe Fleet's strength as a regional, rather than a money-center bank, will make it an attractive takeover candidate itself.
For his part, Mr. Hood says he does not believe the sharing of similar functions and products among banks and brokerages can go too far. ''I guess I believe in the free-enterprise system,'' he says. ''In the end it will be the consumer who will benefit, with better products and better rates. Increased competition tends to breed more-competitive pricing.''