Banker To Banker

Creating “Amazon Prime” For Your Bank

Banking As Membership

In 1987 Robert Plath, a Northwest Airlines pilot, introduced the world to rolling luggage.

 

Since the transition from the steamer trunk to the suitcase around 1907, travelers and their porters had manhandled their belongings on trips much the same way. While some travelers started to use portable luggage carts in the 1970s, and a gentleman by the name of Bernard Sadow invented wheeled luggage, neither caught on for mass travel. 

Are Banks Charging Enough For Their Loan Risk?

The Strategy Of Credit Risk

Bankers are lamenting the current ridiculous low loan spreads and questioning if they are getting appropriately compensated for the risk that they are taking with their capital.  This brings up the question - Are banks getting compensated for all of the risks that they take for extending credit?  Our resolute answer is - no, bankers rarely get sufficient revenue for the risks that they take in lending.

Looking For Innovation At Your Bank? Try Reverse Mentoring

Reverse Mentoring

It is hard for a bank to be more innovative when senior management has little experience with person-to-person payments, the Uber experience, the Dark Web or Snapchat. Without the experience, it is easy to dismiss new technology as a “fad.” This occurred with social media as many bankers grumbled “why do I care what so and so had for dinner” until they realized the level of success that other banks were having through the channel, that many of their profitable customers were using social media and the vast potential for micro-targeted marketing.

Teaching Your Bank To Sell More Products

Bank Sales

By the time you read this we already have an extended weather forecast from a Pennsylvania rodent. Who needs Doppler radar when you have Punxsutawney Phil? Figuring out that we will have an early spring by a random woodchuck shadow is about the same level of science employed in many banks’ sales process. Consider a common problem among bank business development officers – You present a loan or a deposit product to a customer and the pitch worked great.

Does Your Bank Trust Too Much In Trust?

Trust Banking

Before there was banking, there was trust services. Discussed by Homer and then Aristotle, the concept has its roots in both Roman and Islamic law. However, it was English law in the 12th century that had to perfect the structure for noble landowners to pass their estate on to the next generation. As anyone that has seen Game of Thrones will attest, that can get messy. By the turn of the century, chances were that if you were not a savings bank, you were a “Bank & Trust.” These days, about 1 in 6 community banks have trust departments.

Banking Judo –Turning Size To Your Advantage With Credit

Community Bank Size As An Advantage

Having more bankers to throw at a borrower or more assets to flaunt does not make a bank more effective. Strategy beats size every time, but bankers need to be smart how to position themselves against large banks. When it comes to loan mix, community banks need to be careful to assemble their assets with enterprise risk in mind. In particular, the increase in commercial real estate (CRE) and specifically, High Volatility Commercial Real Estate (HVCRE) is starting to be a concern.

5 Things Bankers Need To Know About Deposit Pricing For 2016

Deposit Pricing Trends

Last week we wrote about how some banks are already starting to raise rates and how banks are adding deposits due to lower energy prices creating more disposable income. In the past, we have also showed how today depositor, given the rate environment, is more fee / attribute sensitive, than rate sensitive. Because of the confluence of trends, community banks must make sure to get their deposit pricing right in order to optimize their positioning.

How Your Bank Should Take Advantage Of Falling Energy Prices

Falling energy prices have been front and center in the headlines lately, which is a good thing for retail-oriented banks. Experienced retail bankers understand that consumers often react to lower energy prices by treating it as a windfall and increasing their savings rate. Statistically, the correlation over the last 5 years is that energy prices explain approximately 68% of the savings rate – a correlation that is exceedingly predictive. The question is, what is your bank doing to take advantage of this trend?

 

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