However popular Microsoft’s Excel is at banks, most bankers just use a fraction of the application’s capabilities. As data and predictive analytics become more popular, we still fall back on Excel as our go-to analytic engine. We chuckle when banks talk about using “artificial intelligence” when they are not using even the most basic statistical functions of Excel.
If you are a banker, the public expects, rightly or wrongly, for your spreadsheets to be as tight as your bank vault. The spreadsheet is our stock and trade, and just like no one likes having an unhealthy doctor, no one wants their banker to have a spreadsheet with bad colors, random decimal places and no version control. Over the past several years, we have seen a steady deterioration in spreadsheet quality, and it’s time to turn things around. If you are new to banking, consider this the minimum level of performance.
In an earlier post, we discussed how we use “cost per impression” as a metric for planning, budgeting and executing bank events that are specific for customer retention and branding (HERE). In this post, we expand that analysis and apply it to those events that a bank hosts or participates in that are designed to generate leads (“lead gen”) for product sales.
Before credit, asset-liability positioning, deposit gathering and customer engagement, there is one process that is more important that bankers must get right to be successful - and that is hiring. Get this process wrong and your bank will be an underperformer. Make some good hires and you will likely excel in key parts of your organization. Make hiring a discipline of the bank, and you will dramatically tilt the odds in your favor. There is no single function more important to a bank. None.
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?
Unfortunately, most banks have no idea the answer to the title question. It is actually worse than that - most bankers THINK they know who their best customers are. The worst of all is most bankers can’t even agree on what a “good” customer looks like. If the bank cannot agree on what constitutes a good customer then how can you ever expect to get more of them? If this seems like a trick question, give it some thought. Chances are, you are like most bankers.
Pick up almost any survey, from Pew to JD Power and you will find that deposit account fees are a significant driver of customer satisfaction. Often it is a major factor in choosing or leaving a bank. Unfortunately, many banks set their fees according to where their competitors are. If your bank does this understand that it is based on the fact that your competitors know what they are doing. The logic also presupposes that you are exactly like your competitor in terms of customer, geography, goals and strategy.