Business Segments Personal and Commercial Distribution — Canada Personal Banking Description and Strategy Description and Strategy Overview of Performance Overview of Performance 2003 Focus  Personal and Commercial Distribution comprises the more  than 17,000 sales, service and support personnel who address customers’ needs through branches, instore branches and ABMs, and through telephone, online and business-to-business channels. Our strategy is to sustain continued improvements in our distri- bution capabilities. This will facilitate our goal of being the only financial services provider our customers will ever need, by offering them an integrated multi-channel approach to managing all aspects of their financial affairs. Personal Banking addresses the everyday banking, borrowing, savings and insurance needs of retail customers in Canada.  Our success will be achieved by supporting an effective sales force with cross-channel integration and superior marketing and sales capabilities. We increased our share of our customers’ business for personal banking products through significant growth in our Premium Rate Savings account and mortgage balances. However, in 2002 the benefits of this growth to revenue were largely offset by  continued pressure on spreads. We were more focused in our marketing efforts through initiatives such as  Help Provided , and we expanded our product offerings with the development and launch of term life and universal life insurance products.  We installed Pathway Connect, our completely new sales and service technology platform, in 835 branches across Canada  in 2002, with installation at the remaining branches and call centres to be completed early in 2003. This platform increases efficiency and effectiveness by allowing staff to address customer needs through simplified, paperless processes and fast access to relevant customer information. To complement this new platform, we have developed customer knowledge and decision support software that enables us to focus our marketing efforts and to offer clients relevant solutions at the right time, consistently across all channels. We have substantially completed the streamlining of our sales management processes and refined accountabilities in the branch network. Working in partnership with Private Client Group, we have increased the number of Investment Fund Specialists and Resident Investment Advisors to more than 800. 2003 Focus  We will continue to focus on the basics of improving our people, processes and technology. b Continue to align our sales and service resources with our customers’ needs, values and potential by addressing sales and service roles, accountabilities, behaviours, performance measurement, rewards and recognition. b Continue to improve our customer loyalty scores and close the shortfall relative to the competition, in both the personal and small business banking segments. b Partner with Private Client Group to continue to increase referrals and increase our share of our customers’ business. b Fully implement and utilize the capabilities of our customer knowledge and decision support software, beginning with the small business and direct banking businesses. b Continue to automate and refine processes to improve our customers’ sales experience. b Extend the services offered through our online banking channel. b Continue to build momentum in our balance sheet growth.  b Improve customer loyalty scores and close the shortfall relative to the competition. b Continue to shift our sales and marketing focus from a product- centred to a customer-centred approach.  b Continue to improve the efficiency of our processes. Cardholder Services Description and Strategy Cardholder Services provides Canadian retail consumers and affiliate partners with MasterCard ¤ 4 products and services. We also provide MasterCard commercial products to commercial and small business clients in Canada and Chicagoland, and  e-business solutions to corporate clients across North America. Overview of Performance We recently introduced Mosaik ¤ MasterCard. This new card allows retail customers to select the rewards, special features and rate options that suit their specific needs and provides them the flexibility to amend any aspect of their credit card as their requirements change. Within retail, our net sales continued to grow at market rates, while credit card loans grew at a more modest pace. The corporate business grew a robust 50% over the prior year.  2003 Focus b Retail Card – Through our Mosaik MasterCard, continue to differentiate ourselves as a leading credit card issuer and enhance our profitability. b Corporate Card – Continue to enhance e-business and com- mercial products through customized solutions. BMO FINANCIAL GROUP ANNUAL REPORT 2002 39