January 2020

It Is When, Not If Your Commercial Bank Will Offer Digital Disbursements

Payments and Digital Disbursements

While the eulogy for checks has already been written and cash is starting its demise, the pallbearers are now in place. By our estimation, 14% of banks offer this service and they are starting to reap material rewards. Bank of America, which has offered the product since 2014 is one of the largest beneficiaries and has gathered hundreds of millions in deposit as a result. The rise of real-time processing will only accelerate this move. In this article, we take a look at the benefits and the options for community banks. 

 

Tiering Deposit Accounts Could be Hurting Banks (Part I)

Deposit Management and Account Tiering

Because of tradition, we tier our deposit accounts according to size. For a typical bank, their money market accounts often have six tiers ranging from $2,000 up to $100,000. The question that always comes up is - do you have the right tiers and the right number of tiers? Are you using your tiers to drive profit giving low rates or are your tiers just serving to confuse your customer and drive up operational cost?

Case Study: How To Win More Loan Business

Improving Loan Production

We work on thousands of lending transactions every year with hundreds of community banks across the country.  We participate and help structure financing on commercial real estate, C&I and Ag properties ranging in size from a few hundred thousand to over $100mm, and we collaborate with community bank lenders and underwriters that span the whole gamut of experience.  We witness the good, the bad, the ugly, and occasionally the very bizarre in bank marketing, under

Increase Deposits The Easy Way and Get a 150%+ Return [Template]

Bank Marketing

When you are a banker, sometimes your workload doesn’t come in neat memos or emails. A lot of stuff just gets dropped off on your desk with notes to “Fix This” (like below) or solve that. Fortunately, a lot of these problems are easy to solve.  In fact, one of the most popular strategic initiatives among community banks right now is the nebulous “Need to increase profitability,” which for more than half the estimated banks is an easy one to solve.

Derivatives Are Tough But Hedging Is Easy (Get Our Documentation)

HEDGING OR DERIVATIVES FOR BANK LOAN GROWTH
HEDGING FOR LOAN GROWTH

With a flat and low yield curve, borrowers’ demand for long-term fixed-rate loans is high.  Furthermore, based on the forward market and most analysts’ predictions, the yield curve is expected to stay low and flat in 2020. The difference between five and ten-year loan rates is currently only nine basis points, and the difference between five and 20-year loan rates is 21 basis points.

Why Your Bank Needs A Digital Lead Gen Strategy

GENERATING DIGITAL LEADS
GENERATING DIGITAL LEADS

Unfortunately, in 2020, most bank websites are nothing more than brochure-ware. That is a problem as not only can a bank’s website be its most efficient source leads, but it should also be the best source of conversions (leads that turn into new accounts and loans). While there are several hundred banks that do handle online lead gen well, it is even rarer to have a bank generate leads from its mobile app. This is also a problem as some banks are now generating the bulk of their digital leads from mobile, not to mention the bulk of their conversions.

5 Trends Bankers Need To Know From The Fed’s New Payment Study

RETHINKING PAYMENTS
RETHINKING PAYMENTS

Last month, the Federal Reserve released its 7th, tri-annual U.S. payments study, and, as usual, it had some eye-opening trends that all banks need to consider for their long-term strategic planning. For example, while consumers have always said they preferred debit cards over cash, last year was the first year in US history where consumers used their debit cards (28% of all transactions) more than they used cash (26% of all transactions).

Your Bank Probably Has Loan Size and Risk Wrong

Managing Credit Risk
MANAGING CREDIT RISK

If you are like most banks you have your credit approval and risk process based around loan size. The assumption is that the larger the loan the more risk the bank is taking on so a greater level of risk review is needed. But, suppose the data didn’t bear that assumption out? If that assumption is wrong, then that means that your bank is probably underpricing the smaller loans, overpricing the larger loans, applying the wrong cost structure to the larger loans and misaligning risk against your capital.