Our practice manager, Sharon Chinn, referred to me in her recent post as resident doctor of consumer banking.  I’m flattered!  I only wish that the challenges faced by today’s bankers were amenable to that old-fashioned prescription, “Take two aspirin and call me in the morning.”

I’ve had the chance during the last several years to interact with hundreds of executives at banks, credit unions, cooperatives, and cajas.  It’s been interesting to track the patterns of what’s been cooking on their proverbial front burners.

Challenges have typically been similar across geographies, as well as distinctly cyclical.  It really didn’t matter where you went: with a few exceptions, the same issues tended to resonate across our membership at roughly the same time.  At the turn of the century, it was all about getting on “the Net” (funny how that term sounds dated now!).  Next came CRM, the customer experience, and (by 2006) strategies for continued growth in an environment about to turn.

Read More »

Click Image to Enlarge

The Council on Financial Competition just completed a survey of 1,250 US ”baby boomers” about their attitudes to saving, spending and investments.  With all that has gone on over the past two years we know one thing for sure — whatever financial institutions thought they knew about consumer attitudes and behaviors probably isn’t true now. 

So we asked. 

An early piece of uncomfortable but not surprising news.  42% of mass market baby boomers who in the last year went to the firm that managed the largest share of their savings and investments looking for guidance reduced their share of wallet with the firm.  Only 16% increased their share of wallet.  In contrast, high net worth customers (investable assets greater than $1 million) who updated or created a plan with their advisor were 47% more likely to increase their share of wallet and 43% more likely to increase their investments as a proportion of income.  Why the disparity?

Read More »

It’s stunning to meet with the world’s most profitable and best-managed banks and see the same problem over and over again.  The always troubled relationship between Credit and front-line RMs has deteriorated to new dysfunctional depths, with devastating impacts on RM productivity. Here’s the story that emerges after a little probing.

Most of today’s RM’s grew up in an easy credit environment and few were actually around in the last real recession in 1990. Those RM’s that were successful and stayed in the business learned what a good deal looks like, developing a sense for which  loans were likely to get through the credit process and make their effort worthwhile. They were and are productive because they figured out how to invest their time in pursuing credit opportunities that had a high probability of approval.

And then the rules got turned upside down and–even  in those banks that have become some of the best performers in the crisis–we hear the same stories about how RMs don’t know what a good deal looks like in this new environment, chasing deals that they think make sense based on their experience but the rejection rates keep getting higher and higher. 

I’ve asked this question many times in recent meetings with Credit or Sales – and there usually is an uncomfortable silence and a shocked recognition that they actually don’t know. Read More »

Last Friday the House passed its version of financial regulation reform. What struck me most about the debate was how the final package differed from the original proposals put forth by the House Financial Services Committee. On December 3, I attended a briefing with Congressmen and Financial Services Committee members Brad Miller (D-NC) and Ed Perlmutter (D-CO), who spoke briefly on the status of the bills and their expectations for the full House debate.

Here’s what I see as the key differences between Committee expectations – as expressed by Congressmen Miller and Perlmutter – and the final package, as well as what the House experience bodes for the Senate process:

Read More »

You are probably thinking, “Not those words again!”  Rest assured that I mean them differently.  In our case, credit is truly mutual, credit to the membership for pushing the Board to figure out a way to reach more of you more often and credit to the Board for quickly responding. Welcome to our Blog.

Read More »

I used to work as a Group Branch Manager for a small regional institution – the kind that still has queue problems at the branch.  We had a policy of having no closed teller windows – EVER – because it made customers angry to see that big old “Closed” sign when they were standing in a long line.  One of my biggest nightmares was when a teller called in sick, missed work unexpectedly or quit on short notice.  When things went wrong unexpectedly, we were usually not very quick at fixing them, so often times I found myself on the wrong end of a heated debate – to put it politely – with our General Manager (who I happened to report to), even though often times I had been unable to take action because he had not provided a decision quickly enough.

I’ve been thinking about agility a lot lately.  Not because I’m getting older and can’t move as fast as I used to but because it’s going to be a major area of focus for us in the first half of next year.  Up until now, we’ve worked under the assumption that the main goal of every Operations executive is to provide the best service at the lowest cost.  It’s been pretty clear to me in speaking to some of our more progressive members that while our industry has made great strides in creating efficiency – either because we were forced to by the global crisis or because we’ve been working at it for a long time – some of that efficiency has also led to rigidity, particularly at larger institutions.  We get so bogged down in the day-to-day, and our organizations have become so complex that it is difficult to predict what changes we’re likely to encounter, and even more difficult to decide on how to react to those potential changes once they become a certainty.

My task now and for the next few months will be to reconcile agility and efficiency, find a crystal ball that will allow my members to have a better sense for what lies in their future, and figure out how those same members can move the 800 pound gorilla that is most of their operations without spending a lot of money.

Any suggestions?

You know the saying that timing is everything. In the case of blogs and CFC, this is very true. The past 18 months have delivered more change in banking than most of us can ever remember. We have examined these changes and their implications in our regular research, but the pace of change demands that even a research team leverages the means available to communicate better and more often. Welcome to our Blog.

For those of you whom I’ve not had the pleasure of meeting, my name is Sharon Chinn and I am the head of research for the Council on Financial Competition (CFC). More importantly, as I close out the 20th year of my professional life (eek), I still fondly reflect on my prior roles in banking as a teller, a branch manager, a retirement plan provider, and a strategic planner. Today, it is my privilege to work with you as we face the most serious challenges the industry has ever seen.

As many of you are on the hook for improving transparency, we will do the same for you. It is my hope that through this blog the Council can share its work, ideas, and needs with you on a regular basis. This way, you will know what we are thinking about and working on as often as you would like. And, you should feel free to comment about it. Your feedback makes our work better.

Over the next several weeks, you will meet our team through our blogs. Let me take a minute to give them each of them a quick (and very informal) introduction. Derek Frost is our resident doctor of consumer banking. Michelle Sato has authored much of the CFC work for the past several years.  Anne Walbridge is our small business guru and a Twitter enthusiast. Kiara Domingo has hosted customer focus groups and is an integral part of our branch sales work.

We look forward to being in touch more often and in a less formal way. Talk to you soon.

For those of you who have never blogged, I will let you in on a little secret. Writing your first blog post is not easy. The first post sets the tone. Should it be edgy?  Creative?  Funny?  Luckily, I stumbled across a blog where the author stated “Writing your first blog post is just like walking into a room full of people you’ve never met.” So, with that in mind, I will employ the advice of my mother and do the polite thing. I will start with an introduction.

FS Edge is a blog brought to you by The Business Banking Board (BBB), The Council on Financial Competition (CFC) and The Operations Council (OC.) For the uninitiated, BBB, CFC and OC are membership organizations for leading financial services executives. We provide resources to help these executives make confident decisions and gain global insights. If you want to read more about our organization and our “day jobs” you can check out our corporate website.

What makes us unique is our perspective, which is grounded in the constant and unprecedented contact we have with a global network of thousands of senior executives across the financial services industry.

We plan to use this blog for frequent and informal interaction, to share our personal observations about the industry, opine honestly, and engage in discussions. You can expect to find posts about emerging issues, what we are hearing from your peers and updates on our ongoing research. Sometimes you may agree with us, sometimes not. The objective is to engage in serious discussion about serious issue affecting the industry.  We will try to be edgy and thought provoking in our commentary.  By participating and regularly reviewing the blog you get an edge on the competition.  Edge.  Got it?  We want to hear from you.

Our posts can be sorted by category — Business Banking, Retail Banking or Operations (see it over there on the right?). Or, you can read them all by visiting “Home” at the top of the page.

We’re excited to begin the conversation and hope you’ll chime in with thoughts and comments along the way.  It is an exciting time to be in Financial Services.  Lots to do.  So let’s begin.