American Express 2001 Annual Report Download - page 25

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offers, we could substantially add to AEFA’s bottom line even if only 5 to 10
percent of our U.S. cardmembers became AEFA clients.
❚EXPANDING THE BREADTH OF OUR PRODUCTS AND IMPROVING
INVESTMENT PERFORMANCE: We are working diligently in both of these
areas, since they have a major impact on our ability to attract and retain
clients. During 2001, we introduced 15 new products across our business lines,
including six new funds that are sub-advised by leading mutual fund man-
agers. In addition, we have been developing an integrated relationship
account to enable us to gather a larger share of our clients’ assets, particularly
short-term or cash-equivalent investments. We built the initial infrastructure
needed to offer FDIC-insured cash accounts with competitive payment capa-
bilities and consolidated account reporting. We plan to launch this product
early in 2002.
We also took steps to improve the performance of our proprietary products
by strengthening our investment talent, including the hiring of a new chief
investment officer, research director, head of risk and, early in 2002,
adding several new investment managers to our team.
American Express Bank is another key element in our strategy to grow
our retail financial services business. As cited earlier, we have made strong
progress in realigning the business of the Bank. We have reduced our cor-
porate banking business, while simultaneously growing businesses that serve
consumers – Personal Financial Services (PFS) and Private Banking. With the
bulk of this reorientation behind us, we are now focused on leveraging the
opportunities for cross-selling between AEB and our international payments
business to grow international financial services. In 2001, PFS client volumes
were up by 9 percent for the year, and more than 55 percent of PFS customers
are American Express Cardmembers.
We are also expanding AEB’s reach by partnering with other institutions to sell
our mutual funds to their customers. During 2001, AEB signed more than 50
third-party distribution agreements in Europe. We also added our first part-
nership of this kind in Hong Kong.
In all, we made many fundamental changes throughout American Express last
year. The progress we made in each of our businesses gives us confidence that
we are poised to take full advantage of an upturn in the economy.
axp_23
American Express Bank offers
a wide array of mutual funds to
individual clients outside the
United States both directly and,
in the case of its Epic Class of
American Express Funds, through
other financial institutions.