It is always a delight when we see a CEO grabbing the ‘bull by its horns’ and taking charge when their product enters a new market or their firm delivers a new product. We have seen the likes of Elon Musk show case the Tesla by driving it on stage or Tim Cook playfully demonstrate new emojis on the latest iphone. But when Cavmont’s CEO Charles Carey appeared in a commercial for their newly launched mobile banking offering, we immediately took notice.
When we first encountered the soft spoken and easy going CEO, we believed that his strategy was that of a leader who was not all about the hype; but about delivering quality banking to his customers. Following his appointment as CEO, he immediately targeted a clean-up exercise. The purpose of this was to better understand the type and quality of customer the bank possessed. This was important because rather than focusing on quantity, he pursued quality accounts that would create value for the bank.
Not one to subscribe to the current glitterati that has now become common place with marketing of big banks, Charles chose a personal approach that was indicative of a leadership that was signalling to clients that technological trends were important to the Cavmont banking experience.
The advert shows the bank supremo having a casual conversation with a disk jockey about Touch and Go! To access the facility, all a user has to do is dial *231# on their mobile phone. The feature runs on USSD for banking. Unstructured Supplementary Service Data (USSD) is a technology unique to GSM (Global System for Mobile Communication). Because of its text based nature, this newly introduced feature now compliments their already existing online banking platform.
Some may argue that Charles chooses to be late in the game. We believe he chooses second mover advantage (SMA): where it’s his game not to lose. The “second mover advantage” is the advantage a company gets from following others in to a market or mimicking an existing product. Being a first mover is often attractive to entrepreneurs and investors because of the upside potential and ability to capture and sustain market share. However, we believe his leadership is not about the elaborate and grandiose or for that matter being first to market. At the end of the quarter, it is the financials of competing banks that really counts.
However, there are some disadvantages of not seeking first mover advantage. If the bank was concerned about market share, then they are better off coming up with innovative products that they can take first to market. However, if preservation of market share is a key strategy, then second mover is the better option.
A look at the bank’s 2016 annual report showed that interest income had been on the ascent by 36%. This is something Charles will be keen on maintaining. This was further supported by the board in their decision not to award a dividend so that the bank could use retained earnings to further increase the Bank’s capacity to sustain its profitability.