Keeping up with the speed of change within a bank often requires quick decisions on a variety of topics. Things can slow down when bankers need “perfect” or complete information about a decision. The reality is that perfect information is almost impossible to come by, and even if it was available, it ends up hurting the process anyway.
A common narrative with community bankers is this view that their options are limited. A challenge is often presented with just two options – make the loan or lose the loan, agree to the customer demands or not or comply with the regulators or not. When viewed this way, bankers set themselves up for a sub-optimal outcome as they turn a tactical decision into a self-created conundrum. To increase performance, banks need to realize that there are always more than two choices.
If you are looking to make best-in-class decisions, it pays to have a variety of best-in-class tools at your disposal. Oftentimes, a reason why banks don’t innovate more is because they lack the tools and experience to properly understand the risk and the return. Without a way to quantify the risk, stagnation occurs. As banks develop their risk management culture, it pays to have all managers conversant in the proper tools to manage risk.