Bankers: Are We Passing On The Tough Decisions?

“One of our problems is our long-term employees”, said a banker to me. I have heard this so often that it probably applies to a significant percentage of Jeff For Banks readers. In an era of unprecedented industry change, if your employees embrace change like a cat embraces water, you might have a Problem.

In my life, I have experience in two industries: banking and the US military. Well, I’ve also been in the newspaper business (paper boy), a top chef (Mickey Dee’s), gasoline distribution (Hess boy), and food service (college caf worker). But I wouldn’t exactly call a job designed to earn beer money or to bolster my eight track tape collection experiences worth reflecting on. Note the paper boy gig was not for beer money.

Banks are more worried whilst Google is NOT a bank

I received one interesting comment about Google, Apple, Facebook and Amazon (GAFA) and co getting into banking from one bank: why would they?

His response was based upon the fact that he’s more worried about Google when they’re not a bank than when they are one.

“If they bought a bank – let’s say they acquired Citibank – then this would be good news”, he said, “because that would kill them.”

Google would become stuck with compliance, audit and integration issues and would be dragged down like all banks are.
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Lessons from Borders, Blockbuster and Blackberry

Banks today find themselves in uncomfortable comparable positions to the failed giants Borders, Blockbuster and Blackberry.

Nobody believed David would beat Goliath until he did. Today, with an innovative strategy, the right timing and strong execution, nearly any upstart company has the potential to be David and de-throne the giant in their market. For banks, the long-standing Goliaths of the financial world, responding to small, scrappy startups and to the needs of an increasingly tech-savvy customer base is paramount to their continued success.
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Who is next to break into banking?

In the last three years Tesco, Virgin Money and Metro Bank have entered the banking market as challengers to the big four UK banks – HSBC, Barclays, Lloyds and RBS. With customer trust in banks at all-time low following recent financial crises, does the banking arena need more new entrants and what differentiators do they have to offer?
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How many banks are driving blind?

Building on yesterday’s chat about London versus Europe, there’s more to this than initially meets the eye, as it’s also Europe versus Banks.

That’s the real thing here, and it’s a political agenda rather than a market based one.

The politicians are all conscious of their short tenure in their parliamentary seats and want to reach out to their voters by showing a strong political stance against the banking system.

Knowing that their supporters are driven by the media to believe that all bankers are greedy, arrogant pigs, they do not care too much if they flagellate the industry publicly.

This certainly seems to be the position the Eurocrats take, and it’s why the UK has the problem but, as mentioned, so do the banks.
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Banking on What Makes Sense

Having an effective growth strategy is essential for any financial institution to remain successful. Nowhere is that more apparent than at First Community Bank in Clinton, Ky. According to Cheryl Hartsell, the bank’s vice president of operations, First Community Bank has found its niche in doing what makes sense for the bank and its customers.

“We stay aware of what’s happening technology-wise in the marketplace, and when we find something that makes sense—something that’s good for our customers and community—we act on it,” Hartsell says.
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It’s time for banks to wake up to mPOS

When it comes to the fast-growing mPOS payments market, banks cannot afford to cede the landscape to innovative newer players such as Square and PayPal.

That’s the takeaway from a recent Mobey Forum white paper, which cautions that banks must abandon their “wait and see” approach now and begin developing global mPOS strategies as major retailers move to deploy mPOS technology in their stores.

“It’s difficult for banks to keep up with everything happening in mPOS payments,” Sirpa Nordlund, Mobey’s executive director, told Mobile Payments Today. “But they do need to educate themselves about what is going on, as they can’t afford to leave mPOS to the likes of PayPal and Square.”
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Bankers: What is the value of your strategy?

A colleague and I recently had a healthy discussion about what agenda items to include at strategic planning retreats. He was strongly in favor of showing summary level financial projections for “business as usual” at the financial institution. Showing value creation, or erosion, from doing the same things you have been doing will highlight the need for staying the course or strategic change, in his opinion.

He is right. So often we get bogged down in philosophical debates on what to do about branches, technology, loan growth, expense control, and yes, vision, that we forget that whatever strategic direction the group decides should find its way, long term, to the FIs bottom line to increase the value of the franchise.

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Bankers: What is the value of your strategy?

Your most dangerous competition isn’t a bank

PayPal, Google and even Wal-Mart are already providing banking services today. As Bormann points out, every 60 seconds, $219,000 is paid via PayPal, because it’s convenient – transactions that are completely outside banking, but completely normal to a growing group of customers.

When they want to innovate from this base, they have a magic ingredient: integration across all their customer channels. They understand how customers act when those customers are not using banking services, and they use it to improve what they offer.
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