the blog: TWICE FOCUSED with JIM JONES

Next year will provide banks meaningful opportunities to:

• Acquire new customers, some that may be dissatisfied with their current financial institutions
• Acquire more deposits from customers pursuing a deposit “safe haven”
• Lower marginal costs of funds using advanced product and acquisition strategies
• Build brand recognition among Gen X and Y

I want to let you know about an upcoming seminar that we have designed in partnership with the Massachusetts Bankers Association:

Customer and Deposit Management for 2010:
Opportunities, Products and Strategies

On December 2nd, we will discuss the status of live reverse auctions, social media and rewards checking.  You’ll have the chance to hear from fellow bankers first hand as they describe their experiences with new products and strategies.

I’ll present a 2010 banking outlook customized for those of you responsible for acquiring new customers and increasing deposits.  I’ll also conduct a SurveyMatters live polling session so that you can see your colleagues’ views on important customer and deposit issues.

At the end of the day we’ll conclude with a banker’s panel where your colleagues will discuss the challenges and opportunities of customer and deposit management in 2010.

Seminar details can be found at:

http://www.massbankers.org/vango/core/events/eventdetails.aspx?meeting=CDM09

I hope to see you there!

Recently, I had the pleasure of speaking to risk management executives attending the 1^st Annual WolfPac User Conference at the Colonnade Hotel in Boston, MA.  Watch for this conference to grow next year. I provided a 2010 financial industry outlook.  For an hour we explored the economic, competitive, regulatory and Internet issues that will dominate the financial services industry next year.  Major points presented included a shallow, few jobs economic recovery with unemployment peaking mid-2010 and housing foreclosures and home price declines bottoming out year end 2010.  Also, we discussed possible Washington battles of an intensity we’ve not seen in decades over comprehensive regulatory reform, including new and restructured regulators, the proposed Consumer Financial Protection Agency (CFPA) and national mortgage reform.

The industry faces more regulatory uncertainty than most professionals have seen in their careers.

Competition will increase in intensity next year as some financial institutions (FIs) change business models and as some customers leave their FIs for the promise of better deals and relationships at community-based FIs.  I also spent time discussing how the Internet, with its wave of new Internet-based, financial products such as remote deposit capture and mobile banking, has placed a greater responsibility on risk managers to mitigate internal, vendor and customer risks.   Risk management continues to evolve as an essential executive and employee focus for financial institutions.

Monday evening, July 27, 2009, found my wife and me at an event in Boston held by Banker & Tradesman, a Massachusetts banking and real estate publication.  First Wellesley was being honored as the 2009 Gold Award winner in the Bank Consultant category.  We had a great time at the event and enjoyed speaking with Tim Warren, Jr., CEO and publisher.  Tim is the fourth generation of his family to be involved in Banker & Tradesman – an incredible feat given how much has changed in banking and real estate since 1872, the year Banker & Tradesman was founded.

Tim’s been receiving an enormous amount of media attention this year about two big topics – foreclosures and home prices.  In fact, he had to decline a television appearance scheduled for last night to attend the awards ceremony.  I want to thank all of you for your support of First Wellesley this past year! Without you, this award would not have been possible. Our news release is below.

FOR IMMEDIATE RELEASE

Banker & Tradesman Best of 2009 Readers’ Poll

Wellesley Hills, MA, July 27, 2009 - First Wellesley Consulting Group, Inc. has been named the Banker & Tradesman Best of 2009 Gold Award winner in the Bank Consultant category.  On Monday, July 27, 2009, First Wellesley accepted the first place award in Boston, MA, at a ceremony honoring this year’s award winners.  First Wellesley is honored and pleased to be designated the top bank consultant by Banker & Tradesman.

“We are truly honored to have been chosen by the Banker & Tradesman readers.  We thank the readers and our clients and colleagues for their confidence in us,” said James D. Jones, President/CEO, First Wellesley Consulting Group, Inc.

Banker & Tradesman, founded in 1872 and headquartered in Boston, MA, is published by the Warren Group.  The Warren Group provides comprehensive banking and real estate news and data throughout New England.

• The ceremony honored the best providers of services in the banking and real estate professions.
• Over 3,000 readers voted for the providers that they believe are best in numerous banking categories.
• “This is a subjective, not objective poll. It does not measure who writes the most business, who has the most revenue or the most customers. It does measure the loyalty and satisfaction readers have with vendors. It is an opportunity for readers to speak up for those providers they believe are the best,” said Vincent Michael Valvo, Group Publisher and Editor-in-Chief, Banker & Tradesman.

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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.

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 SurveyMatters^TM 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.