We all want to deliver great customer service in banking. However, the difference between the banks that talk about great service and those banks that deliver fanatical or “Wow” service often comes down to two important facets of bank management – definition and expectations. If you can quickly point to a document or plaque that defines those two dimensions of customer service for your bank then this article isn’t for you.
In a recent blog (HERE), we discussed why now may be an inopportune time for banks to rely on a pay-for-risk banking model. In a pay-for-risk model, banks emphasize generating revenue by charging for risks that they take.
At a recent Community Bankers of Georgia convention, a late night argument ensued over which banks are going to present the biggest deposit challenges for the next year. Now, granted you have to be a banking geek to really care about this on a Friday night, but it is an interesting question as the answer could help your bank more effectively defend its deposit franchise. In this analysis, we turn to the data to construct a “Deposit Threat Score” to hopefully provide your bank with insight into what your deposit future could hold.
While there is no “I” in team, there should be an “I” when it comes to helping bank customers. “How can we help you?” is a commonly used sentence and some banks even train to use the pronoun “we” instead of “I.” It turns out this might be a mistake as recent data shows bankers should be saying “I” instead of “we.” In this article, we look at the research to see how we might improve bank customer service through use of our pronouns.
“I” Before “We”
If your bank is going after millennials, there is a better way. Targeting millennials has almost turned into a full-fledged past time for bankers. There are sessions on it at almost every banking conference, and it is the talk of many boardrooms. Banks often treat the demographic cohort as if it is some magical secret to unlocking the future of banking. We think going after millennials is a little like playing dead for a vulture – it is counterproductive.
We will miss Anthony Bourdain. As foodies, he captured our imagination not just with his food, his travelogue, and his attitude, but with his insider’s view of running restaurants. His book, Kitchen Confidential not only changed how we looked at restaurants as consumers, but it was the first time we started to apply some of his teachings to restaurant lending.
Of all the subsectors in bank lending, industrial commercial real estate (CRE) has been a favorite for the past year. Warehouses, distribution, logistics and manufacturing properties have performed well and banks that sought to curtail retail lending over the past five years have largely increased lending on industrial properties. Since this is such a popular subsector, we wanted to take a look at the data to see what we can glean to increase bank performance.
A “pay-for-risk” model means that the goal of the business is to price risk at a premium so your revenue covers the risk and leaves you with an acceptable profit. If you believe that the business of banking is a pay-for-risk model, then we have some bad news for the current state of banking. The mature economic expansion is not a good time for bankers who expect to be rationally compensated for the risk they take.
Recent changes in rates have given bankers a fantastic window into their deposit base. If you are serious about building a more valuable bank, use this time to look at your data in order to see what deposit customers are rate sensitive and which are not. By knowing this, bankers can better market, plan and manage their deposit base in order to achieve better performing liabilities. In this article, we take a look at how banks can analyze their data and what it means.
The Valuable Deposit Base
If you want to know if your bank has an alignment problem, try this – Ask ten co-workers, ”What is it that your bank is selling? If 80% or more say close to the same thing – that is fantastic, and you are likely in the top 1% of bank performance. If 60% of your co-workers say about the same thing, then move on as that is good enough not to make bank alignment a priority.
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