In the highly competitive banking industry, differentiating your bank from the “big dogs” (large-size banks) and other players in the field takes more than just good luck and a flashy logo. The industry’s highest performing banks are those focused on profitable growth, are highly efficient and have diversified revenue streams.
Best Practices for High Performers
Is your financial institution looking to be more competitive? There are a few best practices that high performers follow to generate revenue and increase efficiency:
- Customer Acquisition
Successful banks do a great job of proactively balancing and focusing on how much they want to spend on customer acquisition and cross sales. They not only know what the profile is for existing customers, but also allocate their spending dollars to really drive growth of new customers.
Pro Tip: Use internal and external data to help craft outreach campaigns to garner new customer acquisition.
- Omnichannel Experience
Creating an omnichannel experience is about providing and executing sales and service consistency across all channels. High performing banks have a defined strategy for engaging their customers across all points of contact, from the first time they enter the branch to their ongoing experiences with the mobile banking app or other technologies offered by the bank.
Pro Tip: Differentiate yourself through customer experience. Turn your customers into strong advocates for your bank by understanding what products and services are popular and delivering a consistent and convenient experience that customers want.
- Commercial Lending vs. Commercial Banking Balance
Payments are the primary non-interest driver for community banks. And strong banks are realistic about how they go to market with their commercial business. Many top performers also do a great job of establishing the infrastructure needed to support commercial banking by choosing one of two go-to-market models:
- Separate treasury management group that does joint calls
- Commercial bankers who are supported by a treasury management group that provides guidance, but frees up the bank to do business development instead of processing and administrative work
Pro Tip: Keep it simple. Let customer-facing bankers focus their time on business development instead of processing, making their key responsibilities revenue generation.
- Strategic Technology
Top industry players focus on implementing the right technology investments and redesigning their processes to achieve maximum benefits. In doing so, they change the behaviors of the people using these technologies to increase earnings performance. They invest in strategic systems that differentiate them from a competitive standpoint.
Pro Tip: Define what technologies are important for you and your customers by using data analytics to understand who your best customers are, evaluate penetration of products, and develop an approach that helps determine where to put resources and marketing dollars.
- Mergers and Acquisitions (Done Right)
In addition to organic grown, savvy banks use mergers and acquisitions to increase earnings and earnings per share. Activity is picking up in the midsize-banking arena, and the players in this arena understand that deals must yield a 63 percent or higher productivity increase in order for them to be lucrative.
Pro Tip: Think beyond 25 percent cost savings. Mergers and acquisitions (when done right) will help earnings growth; but to be a high performer, think about where you need to be to achieve a productivity increase.
Unleash Your Potential for Earnings Growth
In today’s banking environment, only the smartest institutions—and those willing to change—will survive. And the smartest banks are those coming up with creative ways to maximize profits and minimize costs. Whether you’re streamlining your product set around customers and the types of behaviors you want to attract and build, or you’re realigning commercial lending processes, the top performers in the banking industry are focused on earnings growth.
Andy Elliott, senior vice president of customer experience for CSI, presented earnings strategies in our most recent Banking Unleashed webinar series. In his role, he oversees CSI’s Relationship Management, Customer Service and Education Services departments. Andy joined CSI in 1980 after four years in the United States Air Force. During his 35-year tenure with CSI, he has held various positions in sales, operations, customer service, account management, corporate communications, and marketing and education services.