Banker To Banker

How To Calculate The Interest Sensitivity Of People, Products, Branches And Technology

Combining Rates and Strategy

Recently we had a meeting that few banks have. It was a rarity for us, but it was eye-opening for all that attended. It brought an important clarity about the future, a clarity that would be helpful for any bank to achieve, no matter what their size. This meeting was an asset-liability committee meeting (ALCO) of sorts, but it was also strategic.

This Concept of Preferred Habitat Theory Will Improve Bank Performance

Taking Advantage of the Yield Curve

Sometimes things are not as they appear.  Consider the classic optical illusion of the three-prong image below.  The prongs are confusing and it is hard to tell where one prong starts and stops. Combine this concept with “preferred habitat theory” that says that bankers prefer certain maturities or “natural habitats” over others. Preferred habitat theory explains why banks don’t make unhedged 30-year fixed rate loans. In this article, we look at how illusions and preference for natural habitats come together to often mislead bankers.

The Effectiveness of Bank Email Marketing – Deposit Example

When it comes to marketing bank products, email remains king. It is not only the preferred marketing channel of every age group, but it is the most effective as well. Of course, no one wants an irrelevant message that clogs up their day, so a bad email message also has the power to inspire the greatest backlash. In this article, we look at the data on email’s effectiveness and highlight ways banks can better hyper-personalize their message to take their email marketing to the next level.

 

How To Mess Up A Branch Experience

The Branch Customer Experience

We routinely open accounts at banks to assess the experience in an effort to improve our own performance. We recently opened two online accounts (one at a national bank and one at an online bank). Both account openings were fast (under 10 minutes), and the experience was pleasant. We then opened an account in a branch at the same national bank where we opened the online account.

How To Facilitate The Tactical Refinance To Increase Retention

Increasing Loan Portfolio Return

One of the easiest ways for community banks to increase profitability is to stem commercial loans from refinancing to a competitor.  Competition is intense, and community banks that develop a strategy to retain profitable clients can increase income substantially.  While most banks devote resources to marketing, sourcing, and booking new business, much less emphasis is placed on maximizing profitability on the existing loan portfolio by identifying and controlling customer loss (or refinancing risk).  We would like to share one specific strateg

“We Will Never Forget” - But That Is Not Really True

Remembering the Past

On this 17th anniversary of the 9/11 terrorist attacks, another day that will live in infamy, the events are likely imprinted deeply in your memory. Where you were, how you felt when you heard the news and what you did after, are burned deep into your recollection. The problem is, how you remember events isn’t all that accurate. As bankers, this is a problem, as not only are our memories touchstones of our personalities, but the lessons learned from the past need to be accurate if they are to help us in the future.

Machine Learning: Working Deposit Promotion Cycling

Improving Deposit Marketing

In our series of using machine learning on deposit management, one lesson that we picked up is how to segment a market to gather the deposits and the customers that best fit your bank. As we pointed out in previous articles, one problem with our industry is the “lazy carpenter syndrome” which is derived from the old adage that when you have a hammer, everything looks like a nail. For bankers, most potential deposit customers are viewed only through the lens of rate.

Culture and Ride For The Brand

Bank Branding

First Reliance Bank ($534mm, SC) recently took their strong culture on the road, in a manner of speaking, as they rolled out a new marketing campaign called “Ride for the Brand.” This is an easy campaign to pull off yet only a small percentage of banks do it. The campaign asks employees to put their logo sticker on their back windshield or use one of their rearview mirror hanging tags. To encourage participation, they did a drawing for Roomba robotic vacuum for everyone who displayed the “Arc Logo” (below).  

 

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