December 2014

One Way Banks Can Protect Against A Sony-Style Cyberattack

Bank Cybersecurity

Early this year, we strongly recommended that banks changing their mindset when it comes to protecting against hackers (HERE). Instead of thinking of IT perimeter security, banks need to assume the bad guys are going to get through their perimeter defenses and need to design their system in order to compartmentalize information. We even provided banks our cyberattack plan that would have been helpful for any bank that found themselves in Sony’s loafers.

Why Your Bank Is Going To Be Worth A Lot of Money

Bank valuations and new bank applications

The new bank application department at the FDIC was a little slow in 2014. Before the recession, it was common for the FDIC to get 250 applications per year and approve 159 of those.  In 2014, only Primary Bank (in organization) filed an application (still pending). Part of the issue is that if you are crazy enough to want to start a bank you are probably too dysfunctional to handle the management of a bank.

Bank and School Partnerships

Bank and School Partnerships

The latest Consumer Financial Protection Bureau’s report HERE sends a message to banks and highlights the current status of credit marketing in partnership with educational organizations. In this space FIA (the old MBNA), Capital One and UMB are the three largest. While the trend towards more reasonably based bank products and fee disclosures have been changing for a while, we now can get to see the outcome.  

 

TRIA Is Set To Expire and Your Bank Is Now Exposed

Terrorism Risk Insurance (TRIA) Bank Risk Management

Congress just gave banks a lump of coal for Christmas and it is not being received well. Last week the Senate failed to extend the Terrorism Risk Insurance Act (TRIA) which means that this December 31st will be the last day of coverage. This government-sponsored reinsurance program put in place after 9/11 allowed property owners and lenders to cover catastrophic losses (those above $100k) from an event of terrorism such as a bombing, biohazard attack or similar.

 

The Perfect Bank Customer Appreciation Event

Bank Customer Appreciation Events

This week, we spoke on the future of business at one of the best bank customer events we have attended. CTBC Bank ($2.3B, CA) put on a stellar show and today we break down the events elements that will give you some ideas for your next customer “thank you” lunch. No matter what your budget or bank asset size, the goal is to create an event that is focused on the customer, but subtly highlights the achievements and capabilities of the bank.

 

Here is the checklist:

 

How Lean Six Sigma Can Help Your Bank

Bank Six Sigma

When we tell banks they need to get to a 35% efficiency ratio to be competitive in the future they look at us like we are crazier than an outhouse rat. Let’s set the branch debate aside (the largest functional cost area) as that is basically a philosophical argument. Let’s just look at your next largest functional cost – loan processing. We get challenged all the time by banks telling us they are “already at full capacity” and “we are already lean.” We point out that there is a difference between being at full capacity and being at optimal productivity.

The Most Profitable Designed Account In Banking

Bank Account Design and Profitability

Banks computing lifetime value of customers know that there are six components: 1) Cost to acquire; 2) Revenue/cost savings (volume and pricing); 3) Cost to service; 4) Relationship life; 5) Interest rate sensitivity; and, 6) Propensity to generate other business (referrals, related accounts, new product uptake, etc.). A customer represents a stream of cash flow and by looking at the revenue generated; the cost of the account and then discounting all that back over the expected life, banks can derive the customers expected lifetime value.

 

Your Bank Could Offer A Spotted Dick Digital Coupon

Bank Innovation and Customer Engagement

One thing that did not make it into our 2014 Banker Gift Guide that we feel a public service need to tell you about is the limited availability of Spotted Dick (Amazon $19.95). In case you are unfamiliar with the item, Spotted Dick is a traditional, British pudding made with golden syrup and raisins to be served with custard, love and a dose of humor.  If you normally don’t associate culinary delights from England, a can or anything called Spotted Dick, we understand, but part of the beauty of this blog is that it expands your horizons.

 

Our 2015 Holiday Gift Guide For You And Your Clients

2015 Banker Gift Guide Content Marketing Template

It is hard to tickle the cockles of a banker’s heart with a holiday gift mostly because most bankers don’t know where the cockles of their heart are. Contrary to what the press might have everyone believe, we do have them and the reality is they are outsized. Banker’s, as a generalization, are among the nicest, most caring, patriotic and honest as you will find in any industry. This year, as we can personally attest, bankers worked hard putting the industry back on solid footing and we want to give every reader a gift.

 

How Your Bank Might Be Missing The American Value Creation Hustle

Bank Compensation

We recently visited Australia in order to experience the culture, domestic beers and visit bank branches (and not necessarily in that order).  On the 15-hour plane ride to Sydney we had the luxury of catching up on movies one of which was “American Hustle.”  The 2013 crime drama is a good depiction of ambition and the pursuit of profit – ironically, a couple things we found lacking in Australia.