Archive for June, 2009

New England School for Financial Studies – Babson College, May 17-22, 2009

June 26, 2009   Posted in Uncategorized | No Comments | Email This Post | Print This Post

Every year I have the pleasure of teaching at the NESFFS.  My topic is strategic planning.  This May, the Class of 2009’s sixty-eight students graduated from the program after an intense week at Babson College.  We divided the students into twelve teams and each team managed a bank, in competition, for one year using simulation technology.  In addition, each team created a five-year strategic plan.  That’s my area.

During my Thursday lecture on strategy setting, the students completed one team exercise that illustrated why banks in real life are not identical.  I asked each of the 12 teams to identify one core deposit growth strategy.  The teams huddled together to identify their recommended growth strategy.  Interestingly, the 12 teams ended up recommending a total of 9 different strategies.

Remember, the objective was to grow deposits and expand market share.  Teams, during debriefing, presented strategies that ranged from merger and acquisition, new products, advanced technologies, sales and marketing and community outreach.  Ideas included adding business development officers, offering generation-based product families, making deep investments in advanced Internet and CRM technologies and buying a bank.   What was clear was that the teams did not believe that there were only one or two “best” growth strategies to achieve growth.  Each bank viewed the challenge differently and selected different strategies.

Their strategic decision making mirrors real life.  Banks do not pursue identical strategies and do not operate using the same business model.  The variety of responses illustrated that management teams choose different strategies to achieve the same objectives based on a specific bank’s management team, market opportunities, customer mix and core competencies.

New England School for Financial Studies – Class of 2010 – Highlights!

June 22, 2009   Posted in Uncategorized | No Comments | Email This Post | Print This Post

Sixty-five financial services professionals from five northeastern states gathered for their first week of residency at Babson College, Wellesley, MA. I had the pleasure of spending a half of a day with the class of 2010 introducing them to strategic planning.  Certainly planning is an important topic given the continuing uncertainty of the economy and the structural changes in the industry.

During our session, I used SurveyMattersTM to obtain the views and opinions of the group.   Here are some of the polling highlights:

  • The class is generationally diverse. Three of ten are boomers, four of ten are Gen Xers and three of ten are Gen Yers. We have more Gen Yers this year than ever before.
  • These financial services professionals are very heavy users of the Internet and mobile devices. Their top three Internet activities are email, search and online banking/bill pay. Their top three mobile device activities are phone, texting and taking photos.
  • Their financial institutions are making rapid strides in advanced technology adoption. Online mortgages are offered by 72% of the institutions, remote deposit capture by 66% and mobile banking, the latest “tech kid on the block”, by 31%. These percents are much higher than previous years.
  • They predict a “sea change” in the competitive landscape in 10 years. They foresee much greater competition from large banks, Internet banks and non-banks. They see a decline in competition from community banks and credit unions.
  • The two most important business success strategies in their view, must be new customer acquisition and cost containment.

They also believe that generations are motivated to open core deposit accounts for somewhat different reasons.   Top core deposit account opening reasons for the swing generation: personal service, rates and safety.  For boomers it’s rates, convenience and low/no fees.  For Gen Yers it’s the Internet, convenience and low/no fees.

During the next year the students will complete outside assignments and then return for a second residency week. I look forward to coaching the teams through the building of long-term strategic plans next June as part of their week at Babson.

On the Road with Jim…..Milwaukee, WI

June 22, 2009   Posted in Uncategorized | No Comments | Email This Post | Print This Post

I’m in Milwaukee, WI, along with almost 300 attendees at the 2009 Mortgagebot Partner Conference.  My presentation, on June 9, 2009, was Online Lender Best Practices:  New Case Studies Reveal Success and Strategies.  Here at First Wellesley we’ve just completed four new case studies for Mortgagebot.  These case studies focus on lenders that have deployed Mortgagebot online technology and achieved some amazing business results.  My talk focused on Macon Bank, Franklin, NC; LGE Community Credit Union, Marietta, GA; Illini Bank, Springfield, IL and Indiana Bank & Trust Company, Columbus, IN.

The common themes of the lenders were that they all:

  • Identified critical business objectives that prompted them to search for advanced online POS technology
  • Selected Mortgagebot PowerSite® technology
  • Created customized pre-launch strategies to build initial interest in their new online channels
  • Implemented specific ongoing strategies and tactics to increase the number of online channel applications
  • Produced consistently impressive results including high year-over-year online traffic growth, reduced app costs, faster cycle times and improved back-office productivity

In between sessions, I had an opportunity to network with lenders from around the country.  What I continue to find amazing is the extremely high volume of loan applications that have been received year-to-date by these lenders.  Many lenders have already exceeded their total 2008 app volumes.  Many have employed six and seven day work weeks to process the higher volumes.  And, many report a “flight to safety” trend that has led waves of consumers and realtors back to depository institutions for mortgages.  I was encouraged to hear many great success stories that are occurring during the depths of an economic recession.

On the road with Jim……Augusta, ME

June 3, 2009   Posted in Uncategorized | No Comments | Email This Post | Print This Post

May 13, 2009, found me in Augusta, Maine, delivering “The Six Factors Defining the Industry’s Next Five Years.”  The event was held at the Augusta Civic Center, famous for being the historic site of Elvis Presley’s only Maine appearance (May 24, 1977).  Elvis played Augusta and now I had my opportunity!

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My strategic outlook session focused on the six factors defining the future of the banking industry.  We used our SurveyMattersTM technology to conduct instant polling of the 175 member audience.

Here are some of the polling highlights:

  • The directors were split on the possibility of a fourth quarter economic turnaround. A slight majority (54%) predicted that the 4Q09 GDP will be positive. A slightly smaller group (46%) called for a negative 4Q GDP. This split illustrates the high degree of short-term economic uncertainty that banks face this year.
  • Directors don’t see new banks forming in Maine next year. More than three-quarters of attendees believe there will be zero de novo banks opening in 2010. This outlook contrasts with Massachusetts directors that project several de novo banks opening in Massachusetts in 2010.
  • Ongoing compliance costs seem to be rising for many banks. Many banks have added compliance employees and/or outsourced compliance activities to respond to higher regulatory requirements. Some banks also believe they will add additional staff and/or outsource more compliance tasks in the future. This response shows one real cost of the complex compliance environment – higher employee and outsourcing expenses.
  • Directors overwhelmingly believe that robust Internet services and mobile banking are essential to capture today’s new customers – Gen Xs and Ys. To that end, a small number of banks already offer mobile banking and many more plan to launch mobile banking soon. It appears mobile banking in Maine will have a relatively rapid bank adoption rate.
  • Attendees also reported that core deposit competition has heated up. In fact, recent core deposit competition is reported to be greater for many banks as compared to residential mortgage and C&I lending competition.

The city of Augusta was great and the directors were highly engaged and focused on the current state and future of Maine’s banking industry.

On the road with Jim……Westborough, MA

June 2, 2009   Posted in Uncategorized | No Comments | Email This Post | Print This Post

ontheroadwestboro21

OK, so it wasn’t a long road trip for me!

The event was the Massachusetts Bankers Association’s Directors and Trustees College.  The audience included about 80 bank directors and trustees.  My topic was “Banking Industry Trends and Strategic Risk Management.”

We used SurveyMattersTM, our instant polling service, during the session.  Directors answered polling questions about the economy, competition, consolidation, the Internet, customer demographics and regulation.

Here are some of the polling highlights:

  • Attendees predict a steady pace of continued consolidation of area banks fueled by merger activity. The top reasons they see for these mergers include earnings pressures, rising costs and pursuit of economies of scale. Many directors were bullish, short term, on de novo banks, predicting several brand new Massachusetts banks opening next year.
  • Over 90 percent of directors and trustees rely on the Internet. Email, online purchases, news, banking and travel booking are the primary Internet activities of the group.
  • Banks are already confronted with the challenge of satisfying the distinctly different preferences of two customer segments – bank customers that conduct branch transactions and customers that mostly use the Internet for banking. Most attendees said that their bank’s primary customer segments, Boomers or Swing Generation consumers, often prefer the branch. Their new customers, however, are most likely to be the Internet-focused Gen Xs and Gen Ys. It became clear that some banks must continue to focus on Internet/mobile banking technologies to capture these Gen X and Y customers.

One strategic message that I delivered was that greater technology investments by banks will require greater vendor due diligence and more comprehensive risk management to mitigate any potential problems that could accompany a heavier reliance on advanced banking technologies.

Some good news discussed during the day was the solid footing of the Massachusetts banking industry during the midst of a “once-in-a-lifetime” economic downturn!

About Jim Jones

James D. Jones, a national speaker for 16 years, has presented to financial services and mortgage audiences for organizations of all sizes.More >

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