Tag: Bank Strategy

What COVID-19 Might Mean For Your Branch Strategy

Branch Investment Rebalance

Chances are you were already reducing the number of your branches. Between the interest rate environment over the past several years, the increase in digital spend, and the quest for greater operating leverage, banks can no longer afford large branch structures and still return their cost of capital. Recent studies now suggest a lower probability of a COVID-19 vaccine and a much lower probability of achieving herd immunity, at least over the next three to five years. As such, most every bank will be forced to rethink its branch strategy.

 

4 Trends From Money 20/20 That Will Influence Your Bank

Money 20 20 Recap

Last week’s Money 20/20 conference in Las Vegas proved that it remains one of the best conferences for banks that are serious about innovation, particularly as it revolves around payments. The conference is big, the hallways are endless, everybody and their granddaughter is a speaker, the expo hall is ginormous, and the whole conference is almost unwieldy. However, despite these flaws, Money 20/20 is still a gathering that shapes our financial future. While the Libra folks were noticeably quiet and the regulators seemed less involved, there was still lots of action.

The Only 3 Things You Need To Focus on For Bank Strategic Planning

GAINING STRATEGIC VISION
GAINING STRATEGIC VISION

Strategic planning means a lot of things to a lot of different people. One problem that exists in banking is that the act of strategic planning is undefined and so management teams feel that if they can just get to an offsite, sit around a table, work on some budget plans and have an investment banker speak, then they have done their strategic planning. While all of that may help, true strategic planning comes down to essentially meeting two tests.

Changing Payments and Bank Strategy

Bank Strategy
BANK STRATEGY

One item that should be on every bank’s strategic horizon is how to adapt to the changing face of payments. If you are one of those bankers that say, “Cash won’t go away in my lifetime,” you could be right. However, we would posit that the sentiment is the wrong way to frame the challenge and the rationalization that you don’t have to worry about cash, checks and the payment channel will likely lead you to disaster. In this article, we highlight the newest data from the Fed and what it might mean for every community bank.

 

The Successful Bank Strategist's Deck Is Now Available

The Successful Bank Strategist's Deck

Bank strategy is a year-round endeavor and the act of strategic planning has never been more important. A good bank strategy will set your institution apart from other banks and help it generate an above-average return on capital. More than a regulatory checkbox, a budgeting process, a fantasy or a regurgitation of someone else’s plan, the right strategic plan will provide a roadmap to create franchise value. If strategic planning is important to you, we have a tool for you.

 

The Strategist’s Deck

What Are Your Bank’s Priorities?

Resource Allocation

A bank has limited resources and must proactively allocate according to their priorities. Unfortunately, while banks often know their objectives for the year, they often don’t take the time in their strategic planning sessions to place those objectives in a prioritized context and don’t add a weighting to each. As such, there is often a misallocation of resources and a misalignment over the precedence of initiatives. In this article, we look at top initiatives for CEOs, the priority of each initiative and their relative weights.

 

Expanding the Bank Strategy Cube Framework

A Bank Strategy Framework

On our path to describing the Bank Strategy Cube framework, we laid down the four horizontal layers HERE. In this article, we tackle the vertical layers that complete the cube. Where the horizontal layers pertain to strategy development at different parts of the Bank, the vertical layers provide the foundation for execution.

Making Your Bank’s Strategy And Capital Horizon The Same

Bank Strategy

In some of our presentations, we show a five-year performance chart (below). No matter what time period we choose, there are always more banks that underperform than over perform. Further, banks consistently produce under their cost of capital. For example, at present, return on equity performance is about 9.3% or the average bank. However, for the average bank, their cost of capital is between 9% and 12% depending on the bank’s equity liquidity. Why is that? One answer is that banks have the wrong strategic horizon.

Here Is Why Your Bank Should Reduce ATM Fees

Why Your Bank Should Reduce ATM Fees

Driven by the need to increase fee income, community banks have been raising out-of-network ATM fees which are now at record highs. While helping with fee income, this could be a long-run strategic mistake for community banks and may serve to decrease profitability instead of helping it. The larger banks, such as Bank of America and Wells Fargo, have a customer base that is comparatively less fee sensitive. Their customers will pay for the convenience of their ATM network.

Should Your Bank Go To Cuba? [Podcast]

Bank Strategy in Cuba

Ahh, the gentle breeze of Havana – the music, the people, the cigars, the mojitos and the embargo. Given the thawing relations and the new rules announced by the Obama administration, banking and financial transactions are now loosening….somewhat. While the lifting of the embargo will take an act of Congress and is not expected to be reviewed until next year, American companies are already in motion in preparation.

Pages

Subscribe to Tag: Bank Strategy