Boomers are taking control of their finances – unless banks demonstrate how their products help, they will become a casualty of newly engaged boomers looking for change.

For most boomers, the recession has not had a major impact on their retirement hopes – because their retirement hopes were always modest. The recession and stock market losses may have forced a few baby boomers, particularly moderately wealthy boomers, to adjust their image of retirement. However, almost three-quarters of baby boomers have less than $100,000 in investable assets. For these “mass market” boomers, the stereotypical pre-recession image of retirement was always far outside of their financial means. Mass market boomers have modest retirement expectations: they will reduce their living expenses, continue to work part-time, and travel very little. Read More »

I sleep better when the world makes sense. 

Despite its Lean techniques, Toyota, a customer-driven business icon, is struggling.  It makes no sense.  In my attempt to understand their sudden woes, I somehow found my way back to consumer banking and was struck by what I found when I connected seemingly disparate parts of the business environment together—the massive Toyota manufacturing defect and the bank crisis, starting with subprime.   What role does a passion for the customer play in defects of the risk, profit, and accelerator pedal varieties?

How Customer Centricity Killed the Economy, will be the title of the book that I someday write but for now, I am satisfied just to understand the role that a relentless pursuit of serving customer needs played in getting us to where we are today in consumer banking.   Customers hated the onerous process of getting a mortgage and data suggested that risks were low enough to accept fewer, if any, pieces of paper so enter low-doc mortgage.  Customers wanted to buy better homes or get into their first home faster and home values were climbing so enter pay-option arm.  We were all happy until the floor fell out from under us.

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Today’s post isn’t really Operations related.  In fact it’s not necessarily Financial Services related though it is related to finance…sort of.  It’s really about spending and consumer behavior.  My colleague, Elisa, alerted me to a recent article from Gallup, written by Dennis Jacobe.  The article talks about the “New Normal” when it comes to spending behaviors.

The article is a really interesting read – it’s well written and I enjoyed it a lot.  Also, it pairs nicely with the section on customer preferences in last month’s teleconference, Succeeding as a Head of Operations in 2010.

In the teleconference we mentioned that we’re seeing different generations impacted differently by the economic crisis.  For instance at this point in time of the crisis, Millennials, those born between 1982 and 2001 and are entering college or the workforce for the first time, are considered economically formative – they’re forming their spending habits.  Think about the impact that the last year or two has had on this group of young individuals as they’ve formed their spending habits and how the recovery will impact that.  It’s most likely to be different than baby boomers who long ago shaped their spending habits and have encountered multiple recessions.  Read More »

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.

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