articles
What Might Banking Look Like in 2033?
Ten years ago, community banks could succeed simply by: (1) knowing their customers and putting their needs first; (2) matching loan terms to the life of the assets supporting them; and (3) hiring and training good people. Today’s banking is much more competitive and complicated—exponentially so beginning March 2020. The fundamentals are still vital, but will they always be enough? We can speculate, but we can’t know. We can assume that many important things will change in the decade ahead. And if change is all that’s assured, how will you prepare yourself and your bank to be successful?
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Unmaking the Myths: Fact Checking Community Banking
By Achim Griesel and Dr. Sean Payant
Banking, and specifically community banking, is essential to the overall health of our country. By design, it serves as the backbone for our financial system and communities, while playing a crucial role in helping individuals, businesses, and governments thrive. In this highly competitive environment, community banks must continuously adapt to the changing landscape and competitive pressures. The key to success is to challenge and shatter the traditional banking myths that have been prevalent for years. Let’s explore five such myths and why they need to be shattered.
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Bankers Digest | Print (published as “Challenging Some Traditional Myths in Community Bank Operations”)
Battle Ready: Cost of Funds Strategy
By Achim Griesel and Dr. Sean Payant
When rates were at record lows for long periods of time, the true value of low-cost funding may have faded into the background; however, low-cost core deposits continue to be the driver of long-term franchise value. Now, with rates continuing to rise – the one-year treasury exceeded 4% in September 2022 – the importance of low-cost funding is once again at the forefront.
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Ohio Record (published as “Under Pressure”)
Wisconsin Bankers (published as “Under Pressure”)
Stacking The Deck: Secrets of High-Performing Banks
By Dr. Sean Payant
Many financial institution executives spend considerable time thinking about strategies to improve overall profitability and create sustainable growth. The focus on best practices is generally aimed at strategies to cut expenses: using technology, looking at staffing levels and increasing productivity, among others. Although this advice is sound, is that actually what high-performing banks do?
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THE BATTLE FOR DEPOSITS IS HEATING UP: ARE YOU READY?
By Achim Griesel and Dr. Sean Payant
Core deposits, especially low-cost core deposits, have long been the key driver for franchise value in the financial services industry. That said, with the start of the pandemic and the ensuing influx of cash from stimulus checks and increased personal saving rates, financial institutions saw so much excess liquidity that bankers began to question the value of any deposits, including low-cost core deposits.
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The Challenge of Engagement: Re-engaging your team after a pandemic
By Robb Rempel
With 2021 in the rearview mirror, the economy is reopening. Many teams are excited to return to the office, but others hope to follow a hybrid model. The last 18 months have challenged banks to innovate and embrace different staffing models and arrangements to continue serving their communities. As leaders, managers, and team members, we have an opportunity to not just go back to the way things were but to build something even stronger.
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Acquiring New Customers Through Digital Channels: The Holy Grail or Just Another Channel?
Going back a couple of years prior to the pandemic, “digital” was the latest catchphrase in banking. Accelerated by the pandemic and beginning in March 2020, there has not been a single day when we haven’t had the opportunity to read even more about the digitization of the industry. From American Banker to The Financial Brand, our industry publications are flush with articles that include the word “digital.” In each case, the articles address topics such as the fintech threat, alleged changes in consumer banking behaviors or the lure of large financial institutions. If you read further, some even argue that community banking as we know it is headed for extinction as digital channels continue to change how consumers interact with their primary financial institutions (PFls).
Read the article in Bankers Digest | Print
The Digital Dynamic: Community Banking in the Modern Age
Going back a couple of years prior to the pandemic, “digital” was the latest catchword in banking. Accelerated by the pandemic and beginning in March 2020, there has not been a single day where we haven’t had the opportunity to read even more about the digitization of the industry.
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Growth Strategies for Any Economic Environment
In times of uncertainty, organizations have a tendency to put the brakes on, losing sight of long-term strategic initiatives and established growth goals. However, history has taught us the decisions your bank makes today will have lasting implications for tomorrow. Business as usual will return and our strategic initiatives and growth goals will still be there. The key is to stay focused on growing core customers, regardless of the economic environment. Here’s why.
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The Loyalty Factor: Translating Relationships into NonInterest Income
By Achim Griesel and Dr. Sean Payant
The past year and a half has challenged our industry in ways previously unknown. We began the year expecting our biggest challenge would be the continued growth of deposits at reasonable rates. Today, we are faced with three challenges: a prolonged low-rate environment with continued margin compression; keeping branches open/serving our communities; and an increasing number of customer transactions moving to the digital arena.
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Shattering Myths of Banking As We Open 2020
By Achim Griesel
Banking has more customer data than about any other industry. We know financial and personal information and how customers spend money. With data, we can understand behavior patterns for millions of people.
Read the article in Oklahoma Banker
Upside Down Thinking on Efficiency - Changing Priorities To Drive Results
By Dr. Sean Payant
Many financial institution executives spend considerable time thinking about strategies to improve efficiency in order to improve overall profitability. The efficiency ratio is the ratio of noninterest expenses (less amortization of intangible assets) to net interest income and noninterest income, so it is effectively a measure of what you spend compared to what you make. The very name – “efficiency ratio” – makes us think about how efficient we are with those precious income dollars. If a financial institution has a high efficiency ratio, they are simply spending too much of what they make…right? That is exactly what the name implies (emphasis on the spending side of the equation). But this is just a ratio of two numbers, and as we all know, there are two ways to bring the ratio down – reduce costs or increase revenues.
Navigating Uncertainty: Creating a Path Forward
By Dr. Sean Payant
In times of uncertainty, organizations have a tendency to put the brakes on, losing sight of long-term strategic initiatives and established growth goals. However, history has taught us the decisions your bank makes today will have lasting implications for tomorrow. Business as usual will return and our strategic initiatives and growth goals will still be there. The key is to stay focused on growing core customers, regardless of the economic environment.
Branches Bounce Back with Strong Retail Sales After Initial COVID Hit
By Achim Griesel and Dr. Sean Payant
Data from a cross-section of community financial institutions shows resilience in the in-person model despite challenges of the pandemic. Retail checking account opening once again occurs mainly in-branch. New business accounts, however, have followed a different path.
Read the article in The Financial Brand
Growing NonInterest Income Without Raising Fees
By Dr. Sean Payant
Over the last 10 years the banking industry has seen a steady decline in fee income associated with checking accounts—community banks under $10B have seen a 32 percent decline and banks over $10B have seen a 45 percent decline in fee income when compared to a 2008 baseline. Many institutions are raising fees. Should you?
Read the article in West Virginia Banker
Consultant: Banks should grow through customer acquisition
Lincoln-based consultant Sean Payant urged banks to grow their organizations by adding customers and not cutting expenses during his presentation at the Bank Holding Company Association’s Spring Seminar.
Read the article in Bank Beat