Global Banking … The bank of the future will have specialists who can call on business accounts and regularly pop one million-dollar checking account after another. … Every bank and credit union develops clearly-defined lending standards. In a rising rate environment that is coupled with strong economic growth achieving deposit goals is the best way to … If bank financing isn’t possible, you’ll need to use your own internal funding. This scrutiny necessitates risk mitigation with stringent debt collection processes and consistent follow through, as a single compliance error can expose your bank to the risk of significant loss. The consulting firm encourages banks to better evaluate... 2) Increase productivity using … Many banks have recognized that they need a truly differentiated … This website uses cookies and third party services. Banks are hungry for growth: hungry for new customers, for deeper and more profitable relationships with existing clients and for better alignment of expense against revenue opportunities.   Financial institutions who increase their loan portfolio by lending to borrowers with lower credit scores gain a higher interest spread and greater interest income. One powerful tool to enhance value is to identify account “twins” and consolidate them into a single, higher value relationship. CARM-Pro™ user-friendly software also provides enhanced executive-level tracking and reports that support your bank or credit union leaders’ efforts to develop and enforce banking strategies for growth. Staff productivity. Tools exist to predict how customers will value financial products, and what price they are willing to pay, with a high degree of accuracy.   Lending to clients or members with low credit scores can result in greater delinquencies, but financial institutions can minimize this risk by leveraging CARM-Pro™ to enforce more aggressive debt collection policies. Utilize data analytics to improve fundamental product economics. Fifty-five percent of the owners of small and medium sized enterprises are willing to consolidate their personal and business relationships at the same financial institution, according to a BAI Research report. BAI Banking Strategies Your trusted source for actionable insights and groundbreaking ideas. Standardized neighborhood marketing programs build on micro-market analytics to focus the right tactics on the right trade areas. This robust debt collection system enables your collection staff to execute your financial institution’s collections strategy. CARM-Pro™ automatically records all actions taken by each collector, by date and time. Lack of the right sales process and lack of the right predictive analytics that target the right customer. Yet, we know that the majority of balances are not consolidated. This proven software’s comprehensive … There has long been a disconnect between the willingness, even preference, of customers to consolidate multiple relationships at their primary financial institution, and banks’ ability to effectively execute strategies that accomplish this. Customers are already migrating toward self-service channels, but the most expensive channel, the branch system, remains the primary point of contact. There are multiple ways to monetize data. Integrate your current banking policies, compliance strategy definitions and requisite collector actions to CARM-Pro’s unlimited database, and leverage full or collector action initiated work flows. The best way to mitigate risk in banking is to leverage CARM-Pro™ to enforce your financial institution’s policies and protect the integrity of your banking process using automated debt collection software. Yet, in the past, investment in training has not been sufficient to reverse the downward trend in branch sales productivity. The lower acquisition cost is not just an end in itself, but it also allows for re-allocation of investment to future digital growth strategies. Scalable CARM-Pro™ empowers bank & credit union executives to proactively implement bank branch growth strategies. Diversify services. Consumers report a similar willingness. Finding topline revenue growth is the core issue facing the industry, and this begs for new pathways to success. As an example, a large regional bank that we know used data analytics and market research to successfully restructure demand deposit account pricing, resulting in a net increase of over $60 million in revenue. In addition to reducing process costs, automation tools can help improve staff … San Antonio, Tex.-based Frost Bank has a well-integrated approach to delivering financial services, even dropping the term “Bank” from their branding in favor of “Frost: Banking, Investments, Insurance.”. CARM-Pro™ Collection and Recovery Manager – Professional™ is a dynamic debt collection system that maximizes your collections team’s productivity, enabling them to work more past due accounts than ever before. Financial institutions are simply unable to charge for services that were once common sources of profit. Combined with focused sales processes and product-bundling strategies, these methods produced an 85% improvement in household when implemented by one of our clients. Fewer customers are visiting branches as routine monetary and service transactions migrate to other channels. Expand relationship depth. It also decreases risk by not compromising the frequency of follow-up communications with delinquent debtors. The type of growth or expansion options you choose will dictate your potential funding options. This proven software’s comprehensive features empower financial institutions to grow their loan portfolio, increase income, and reduce risk. Collection steps that are missed, performed late, and improperly documented can lead to fines, penalties, and litigation losses for your financial institution. Growth strategies Banks can’t ride fee income gravy train much longer Noninterest income has bolstered profits this year. Peoples Bancorp of Marietta, Ohio, has thriving wealth management and insurance subsidiaries. Community banks are more dependent on deposit fees compared to larger institutions and this makes them vulnerable to a transactional model where consumers acquire low margin products from their primary bank but use specialized providers for high-margin products, such as investments and loans. However, direct mail is increasingly less efficient as customers communicate by text and email. The Right (and Necessary) Policies. Mr. Kerstein is president of Austin, Tex.-based Peak Performance Consulting Group, which specializes in community and retail banking strategies. … The few “experience leaders” emerging in retail banking are generating higher growth than their peers by attracting new customers and deepening relationships with their existing customer base. Collectors gain a comprehensive 360-degree view of all borrower accounts, including the status of delinquency and data from their institution’s primary servicing system, which saves time and ensures compliance. However, as the economy strengthens, these gains may be offset by competitive pricing pressure. ARM-Pro™ debt collection software enables community banks to increase net income by improving debtor communications. The opportunity is compelling. However, this high-end collection system technology allows for earlier and more frequent debtor communication, and manages risk to avoid a corresponding increase in losses and to gain a greater yield on higher interest loans. We see continued growth in our digital and mobile channels, with 37 million digital banking users; nearly 27 million are active mobile banking customers. Set Yourself Apart from Competitors (in a Good Way!) PNC Bank took a similar approach, which enabled them to drive more branch traffic and acquire accounts at a lower cost. CARM-Pro™ diligently enforces your financial institution’s strategy by enabling your collectors to store and leverage the data you require into unlimited inclusion and exclusion debtor selection parameters (for any action – communication, work list, etcetera) within CARM-Pro™. This empowers collection agents to fully comply with your institution’s policies, as well as state and federal regulations, to minimize the risk of non-compliance. Editor Note: David Kerstein has updated this article. These tools can help identify specific fee, balance and service combinations that customers prefer. New Bank Strategies Require New Operating Models Disruptions in banking are pushing banks to take more explicit strategy decisions. Overdraft (OD) fees have been severely constrained, and the situation will only worsen as new regulations from the Consumer Financial Protection Bureau (CFPB) further limit this important source of revenue. Â. Low interest rates continue to put pressure on margins. Although conventional wisdom commonly warns of the death of retail banking, community banking is alive and well… but could be doing much better. He can be reached at [email protected]. BAI is Bank Administration Institute and BAI Center. CARM-Pro™ debt collection and recovery technology by IBS is the sought-after solution for banks and credit unions seeking better banking strategies for growth. Then CARM-Pro™ will execute efficient workflows and sequencing of all required compliance steps. 1. For example, the concept of “neighborhood marketing,” pioneered by Umpqua Bank, is based on embedding local micro-market strategies into the marketing and sales process, which can significantly reduce customer acquisition cost. Local search engine optimization (SEO) ensures prospects will find you online. It makes them more efficient to operate, but also means they lose the marketing “billboard” impact of a large facility. Several community banks are gearing up credit card operations. Every bank or credit union has its own unique banking strategy for growth. We expect checking account economics to improve with rising interest rates. CARM-Pro™ debt collection and recovery technology by IBS is the sought-after solution for banks and credit unions seeking better banking strategies for growth. The grass isn’t always greener on the other … Here are five suggestions for such a different approach: Change the customer acquisition model. © 2020 Intelligent Banking Solutions, Inc. All Rights Reserved, Banking Strategies for Growth: How to Grow Income & Reduce Risk, Increase Bank Profitability with Customizable Debt Collection Technology, Increase Loan Volume and Decrease Delinquency Risk for Your Bank or Credit Union, Execute Your Banking Strategies for Growth with Scalable Collection & Recovery Solutions, How to Mitigate Risk in Banking: Use CARM-Pro™ Debt Collection Software, Frequently Asked Questions About Banking Strategies for Growth, Pre-alert debtors of reoccurring near term (future) payments due, Initial contact immediately at past due status, Much earlier subsequent debtor communications, More frequent debtor communication during the delinquency, Communicate to debtor via any debtor preferred communication channel: email, SMS, USPS, deliver pre-recorded blended voice messages or simplified dialing, Provides additional communication channels (pre-recorded voicemail, SMS, email), Expands the collection period beyond the daily hours that collectors are typically in the office, Increases the probability of debtor contact and subsequent follow-through with payment, Reminds borrowers of payment deadlines and holds them accountable. In our survey, 78% of respondents reported that improving sales skills was their bank’s primary strategy for growth. Simple presence in the community doesn’t automatically create gravity and attraction – that requires more focused programs. At the same time, encouraging non-branch transactions increases interchange fee income and helps offset declines in OD and other miscellaneous fees. Jeanne Pinder Sep 26, 2019 Digital transformation’s top 10: The impact factors that matter As new fiscal … These prospects are “findable” in that targeting strategies can locate prospects with a high potential for consolidation. The best strategy to increase a bank or credit union’s loan portfolio is to create clearly defined policies, reduce credit standards, and use CARM-Pro™ debt collection technology to diligently enforce them. Indiana, Penn.-based First Commonwealth Bank re-entered the mortgage business. Another type of specialist will be masterful at cross sales … According to the … Change the customer conversation. The road ahead cannot be a matter of, “train them on products and let them figure it out.”. Banks need to re-establish the branch as a destination, a place where people want to go versus a stop for an infrequent errand. Lower credit scores can also lead to high delinquency rates.  When financial institutions lower their standard for credit approval in conjunction with enforcing more aggressive collection policies on new loans, they can minimize delinquency risk by leveraging powerful CARM-Pro™ debt collection technology.  CARM-Pro™ ensures consistent follow-through with frequent, multi-channel debtor communications that lead to faster loan repayment. With CARM-Pro™ you can now “soften” your credit standards, open a much larger market, and allow your bank to successfully manage credit risk with high end collection system technology. BAI © 2020 All rights reserved. To get the most out of growth, banks need to define what growth they want, how much-increased risk they are willing to take and how to allocate resources to accomplish that required growth. This boosts productivity so much that it frees collectors to work prior charged-off accounts – thus increasing bank profitability by recovering non-interest income. 4 The future of growth and the banking industry In the complex environment that defines the banking industry, the simple fact remains that strong customer relationships are still the most important contributor to a bank’s growth … Staging of customer traffic patterns, merchandising placement and teller referrals were keys to a robust sales process. There are barriers to the development of … Sales effectiveness is not just a function of knowledge, but also of discipline and coaching. Sean C. Payant, Ph.D., is Chief Consulting Officer at Haberfeld Holdings, a data-driven consulting firm specializing in core relationships, customer, and profitability growth … In the contemporary banking environment, state and federal regulators increasingly emphasize collection compliance. However, there is a tendency to think that consistent process in customer conversations somehow indicates a “robotic” interaction. Unable to charge for services that were once common sources of profit deploying CARM-Pro™... Means they lose the marketing “ billboard ” impact of a large facility, encouraging non-branch transactions increases interchange income! Fee income and helps offset declines in OD and other significant client discussions and let figure... Taken by each collector, by date and time execute efficient workflows and automated allow... 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