One of the things we have been experimenting with is inputting loan credit information using voice recognition. So far, it is equal to typing in terms of effort and speed, but that will change in the next year when it will become faster to use voice. As mobile and desktop computers become quicker and recognition algorithms become more accurate, speaking commands will become easier than typing for more complicated tasks.
Banker To Banker
If you think your business model is challenging now, just wait until The Millennials or Generation Y get to prime banking age. The front end of the 80+ million cohort turns 24 this year which is significant for community banks as that is about two years away from the average Millennial-owned account becoming profitable. If you are a bank like ours, who has a customer base that already skews older, the Echo Boom is going to present a unique set of challenges.
Lots of bankers are confused between the difference of marketing and branding. The distinction is important. If your bank has a strategic goal to increase brand, and it ends up marketing, then branding is never accomplished. Where marketing is the process of telling the public about your bank, branding is the message that the public has about your bank. In other words, marketing is you telling a customer that your bank has great service, while branding is the customer telling you that you have great service.
While bankers are a conservative bunch, we are not without humor and wit. Below are some classic office pranks provided for inspiration that will be sure to have you owning April Fool's day.
1. The Human Chair
2. The Airhorn Behind The Door Prank For the CIO
One of the classic mistakes that most of us made back in 2006 is not taking a forward looking view of credit. We underwrote credits based on current debt service coverage and current loan-to-values, instead of using forward values. This was a mistake, as had we looked ahead, we would have seen a large portion of the economic downturn.
As the last day of the Western Independent Bankers wraps up, we thought we would highlight one of the other top presentations that made us think. Joe Cady, Managing Partner from CS Consulting, presented his data on “The Best Business Models in Community Banking.” Given that 90% of banks are re-evaluating their business models, according to KPMG, Joe looked at 59 banks from 2006 to 2011 that had an average ROA of 2.2x and an average ROAE of 19%. The study excluded credit card and other specialty banks.
We are at the Western Independent Bankers this week and the most interesting presentation of the day came from Cort O’Haver, the Senior EVP for Umpqua Bank and new co-President of Sterling (their latest acquisition) on how their bank deals with uncertainty. In addition to looking like Ray Davis, tan and all, Cort sang from the same sheet of music as Ray as he talked about how Umpqua is positioned to deal with change.
There is a classic debate in banking of whether it is better to diversify your loan portfolio or to “stick to what you know.” The logic of the stick-to-what-you-know camp is that since you understand X (insert your specialty – real estate, doctors, residential, etc.) your return will offset any gains in diversification.
Yesterday’s blog on how little branch hours are correlated to revenue and customer satisfaction elicited a healthy dose of responses. If branch hours nutted some bankers up, just wait for the rest of today’s post, as this might really short circuit some guarded beliefs. The picture below is from our data and research and is a heat map of some selected factors and how revenue and satisfaction are dependent on those factors.