American Express 1998 Annual Report Download - page 8

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6
this area as we forge new partnerships and deepen
relationships with our existing partners.
EXTENDING FINANCIAL SERVICES PRESENCE
Our goal is to become as widely known for financial
services as we are for the card and travel businesses.
We are positioning Financial Advisors, the
centerpiece of this effort, to become the company
of choice for delivery of financial advice, prod-
ucts and services anytime and anywhere.
We are establishing a broad-based presence in
the marketplace through a strong network of
more than 10,000 trained advisors, Internet-
based services, institutional distribution —
including 401(k) products — and third-party
distribution through banks and credit unions.
During 1998, the cross-selling of financial ser-
vices to our Cardmembers gained additional
momentum. About one-third of new Financial
Advisors clients were Cardmembers. Nonetheless,
we have not made as much progress as we would
have liked.
EXPANDING INTERNATIONALLY
The third component of our growth strategy is to
expand our business internationally. Despite dif-
ficulties in many markets outside the United
States, we continued these efforts in 1998 because
our view of the long-term potential in this arena
is unchanged.
During the year we introduced in excess of 30
new proprietary card products outside the United
THREE AVENUES FOR GROWTH
In our letter last year, we spoke to you about our
three themes for growth: opening the American
Express Card network to banks and other
institutions, expanding our financial services busi-
nesses, and building our presence in markets
outside the United States. We remain committed
to these themes and, in 1998, we made progress on
all three.
OPENING THE NETWORK
As noted earlier, we added 16 new bank partners
to our network. New arrangements announced
during the year include joint ventures with Credit
Suisse in Switzerland and Generale Bank in
Belgium and our first network card in Australia
with AMP Banking.
Although the United States market remains
effectively closed because of illegal restraints by
the bankcard associations, we hope that we will
be able to partner with United States banks in the
future to offer consumers a broader range of
more competitive products. We are seeing signs
of discontent with the card associations from
some of the larger issuers, perhaps foreshadowing
a fundamental change in the relationship between
Visa/MasterCard and their members.
In the meantime, the value we offer to banks
outside the United States continues to generate
significant growth and consumer benefits. Business
billed on network cards increased 30 percent in
1998. We anticipate continued strong progress in
Partnering with banks and other financial institutions is a key growth area. In 1998,
we added 16 new bank partners, helping them develop innovative products and ser-
vices that operate on our card network. In total, the business billed on network
cards increased by 30 percent over the prior year.