RBC Bank’s focus on Canadian customers is paying off

The current iteration of RBC Bank is a thriving, one-of-a-kind financial institution.

When Royal Bank of Canada sold its U.S. subsidiary, Raleigh-based RBC Bank, to Pittsburgh-based PNC Financial Services Group for $3.45 billion in 2012, it shed more than 400 branches across the Southeast. But it held onto the business that caters to Royal Bank customers when they’re in the U.S.

That operation, also known as RBC Bank and likewise headquartered in Raleigh, has expanded its local workforce by more than one-third – from 95 employees when the PNC deal was completed in March 2012 to about 130 today. Its client base, meanwhile, has expanded from 165,000 to 213,000.

Tracy Stevenson, president and CEO of RBC Bank, expects the bank’s robust client growth, and the expansion of its Raleigh workforce, to continue thanks in part to attractive demographics that are boosting the ranks of potential customers.

RBC offers checking and savings accounts, debit and credit cards, mortgages and other loans, and access to funds based in Canada to “cross-border” clientele. They include Canadian “snowbirds” who winter in warmer U.S. locales, Canadian students attending U.S. universities, and expatriates who are permanent U.S. residents.

Today RBC Bank has no branches, instead offering services in all 50 states online and via phone. Its clients also have unlimited free access to PNC’s 8,800 ATMs and limited free access to other bank’s ATMs. Most of the phone service is handled by Canadian employees in Montreal and New Brunswick.

Royal Bank, Canada’s largest bank, started offering cross-border banking services in conjunction with RBC Bank in 2004 as a way of differentiating itself from its Canadian competition.

Stevenson said RBC is benefiting from an aging baby boomer population. (Yes, Canada had its own post World War II baby boom.) That is swelling the ranks of retired and semi-retired affluent Canadians who are spending the winter in the U.S. or buying property here.

In addition, even after accounting for the strength of the U.S. dollar versus Canadian currency, a hot Canadian housing market has made U.S. real estate more attractive. That’s fueling growth in RBC’s mortgage business.

“U.S. vacation-type property still looks very affordable,” said Stevenson.

The bank also is expanding its customer base by offering banking services to Canadian companies that do business in the U.S.

And it works with Royal Bank employees in Canada to ensure that they let customers know that the cross-border services are available. The tagline on RBC Bank’s marketing materials is, “Where Canadians Bank In America.”

Whereas the “old” RBC Bank was headquartered in a downtown Raleigh skyscraper that bore its name, the “new” RBC is based in two floors of a Brier Creek office building in northwest Raleigh.

“We went from a traditional U.S. bank with ... 5,000 employees to an entrepreneurial startup,” said Kristen Doherty, vice president of sales, marketing and communications.

Indeed, given RBC Bank’s relatively small size and the seasonal nature of its business – which mushrooms during snowbird season – employees need to be able to step in as needed to help with tasks that aren’t part of their day-to-day jobs.

The “fresh eyes” they bring to the assignment can also lead to valuable suggestions.

“That’s where a lot of our process efficiency and a lot of our client experience enhancements have come from,” Stevenson said.

David Ranii: 919-829-4877, @dranii