Problems Facing Community Banks
Bob Cooper believes that each community bank, like its community, comprises a unique mixture of services, people, and customers. If managed properly, these elements create opportunities for enduring growth.
Often, the daily demands of operating a bank make it challenging to stay focused on improvement and be mindful of the winds of change that affect banking. Bob has found through his experience that the opportunity to improve is always closer than it seems.
Insights & Implementation
Now more than ever, community banks need expertise and actionable insights to address the changing demands of regulatory, technology, earnings, consumer behavior, and market pressures.
Resolving these challenges requires a dedicated, agile, and custom approach that Bob can deliver. He works closely with senior management teams to discover, analyze, and recommend improvements that are cost-effective and ready for implementation. He is an experienced agent of change, strategic and innovative.
5 Keys to Success
Building Operational Excellence
#1 Culture
Regardless of the institution's size or origins, legacy processes die hard. An organization that can get comfortable with having a framework and discipline of continuous process improvement will always have an advantage in an ever-changing marketplace. This means creating a common end-to-end understanding of how products and services are delivered to the customer. I recently had a client with four bank areas processing ACH, wires, deposits, and transfers with different policies and procedures- even though they were touching the same customers and using the same core platform system. The net result is training and maintaining staff to support Online banking, Corporate Treasury Management, Deposit Operations, and Loan Operations to process their mis-postings, returns, originations, and risk controls.
#2 Strategy
Build a system that encompasses the entire client experience, including not only day one but day 701. Align your plan to include a stated required infrastructure and cost structure to compete, expected volumes of maintenance, or modifications to the service or product that can be expected. This includes ensuring your training, policies, procedures, and personnel needs are considered in your customer experience. For many of my clients, I start with a simple 80/20 rule: looking at 80% of the revenue, costs, risk, and transaction types among the client base and process map the current state. This will quickly show you the low-hanging fruit in client or associate irritants or what makes a $4 risk have a $40 solution. Finally, make sure that you are consistently engaging your back room and support subject matter experts when planning and not as an afterthought. Simply put, superior operational delivery should be a stated strategic competitive imperative. Don't believe me? When was the last time you bought something from Amazon? And they started with books!
#3 Procurement of Technology
Invest not only in technology but the time and people it takes to leverage it fully. Business leaders should define the requirements and thoroughly understand them BEFORE selecting the technology solution- not after. Over the years, I've come upon numerous abandoned vendor solutions where the bank is paying thousands of dollars to support a product with three customers - all 3 make a total of $40 per year to the bank. The solution might be great, and if it is, why are there only three clients? If it stinks, kill it. We'll talk more about this when we get into product management in a future writing. For now, if digital delivery architecture is a key to the institution's success, integration is more important than features (or the other way around). Too many times, I've come upon great technology solutions that were purchased, implemented, and then forgotten. They become an expense and an underutilized opportunity.
#4 Organizational Alignment
Build your organization around functional needs- not individuals. This is a tough one for smaller organizations where we wear many hats. The net result is that a resource that is a subject matter expert in credit administration, for example, keeps that function forever- regardless of how their role evolves or how organizational needs change. Start with the organization being aligned to the needs to support your strategy and THEN put people to the roles - not the other way around.
#5 Understand Your Metrics (and Risk)
Use data to help understand your current state and optimal performance. Cross-sales, number of card transactions, adoption or abandonment rates of key services like digital, channel usage, client tenure, account opening or servicing duration, or transaction frequency. Not only will these numbers highlight opportunities to save time and aggravation, but they also might uncover under-exploited needs or revenue resources. I once created a partnership with the 4th largest tax preparation service in America that generated millions in additional income by wondering why there were so many waived check fees at one office (that's a story for another day).
Successful Project Outcomes
Retail Banking Operations
Retail Banking Operations, Product, & Strategy Review – Identified $200 Thousand in annualized interest and non-interest revenue growth for $250 Million asset community bank.
Recapitalization
Recapitalization – Presented business case to world’s largest PE firm and secured over $300 Million in fresh capital investment.
Risk Management Framework
Risk Management Framework – Introduced Policies and Key Risk Indicators reporting for $7 Billion institution in less than 5 months to directly address regulatory concerns.
Bank Turnaround
Restored profitability in just 20 months to bank with multiple Consent Orders and MOU and a loss of $20 Million per year, including termination of all regulatory findings.
Revenue Accelleration
Revenue Accelleration/Platform Architect – Delivered franchise-wide system upgrade that yielded 70% reduction in account opening time, 100% compliance with BSA/KYC regulatory rules, and increased cross sales by 60% within first 90 days of implementation.
Award Winning Digital Banking Solution
Developed Award Winning Digital Banking Solution – Generated $2.7 Billion in low cost deposit growth for $30 Billion asset institution.
Commercial/Business Deposit Business Risk Review & Recommendations
Commercial/Business Deposit Business Risk Review & Recommendations – Identified $500 Thousand in annualized non-interest revenue growth for $2 Billion asset community Bank.