December 27, 2017
Authored by: Crystal Homa
With the end of the year approaching, it is time to start looking forward to 2018 and putting together that list of New Year’s resolutions. This list of annual goals can be especially important for community banks because, let’s face it, times are a-changin’ and community banks cannot afford to ignore this, especially in the face of the ostensible juggernaut that is fintech. “New Year, New You” doesn’t have to be a mantra solely for individuals; it can also be a mantra for community banks who want to make 2018 a successful year. To get you started, we have provided some suggestions that may help you turn 2018 into a very positive year for your bank.
Don’t be Consciously Blind
With such a vast amount of information thrown at us every day, I think we are all guilty of becoming consciously blind. It’s true, all the information can overwhelm us, making us turn a blind eye and ignore what everyone has to say and assume if something really important happens, someone will tell us. As a banker, you cannot afford to do this. With the promulgation of new regulations and advances in technology, it is important for community banks to remain aware of the financial landscape and evolve. Whether this means meeting revised regulations or updating technology to meet your customer’s needs, make a resolution to stay abreast of information that may affect your bank.
Truthfully Evaluate your Branches
Don’t get stuck in a rut with your branches and simply maintain an old building simply because it was the first branch or it offers some nostalgia of earlier days in the bank’s history. As a community bank, you proudly cater toward your community; however, this means evaluating how your community’s needs have changed. Have traffic patterns changed in your community? If so, your branch may now be either difficult to access or simply out of the way for your target customers. With the many options people may have for their banking needs, one way a community bank can be competitive is by providing convenience. Do you have a building that is outdated and costly and burdensome to maintain? If so, perhaps consider whether it is practical to maintain that building or relocate the branch.
Evaluate your Regulatory Compliance Procedures
A large component of ensuring your bank is successful is maintaining effective regulatory compliance schemes. This includes keeping up on changes in regulations, but also maintaining proper internal policies and procedures for record-keeping and reporting and making sure all required notices are up to date.
While the incident rate of the assessment of civil money penalties is low, failure to appropriately comply with regulatory requirements can a detrimental impact on a bank, even if it does not directly result in a financial penalty. Being out of compliance may extend examinations and may subject the bank to enforcement actions such as consent orders where the bank is required to develop and implement enhanced programs. Being forced to implement such a program based on poor results of an exam forces the bank to turn its attention away from ordinary business. Regulators may also require the bank to contract with an independent third party to test and evaluate the bank’s controls and procedures, which can become quite costly. Make a resolution to save your bank the headache and expense that results from compliance violations and evaluate your procedures and update where necessary.
Another very important aspect of complying with regulatory requirements is providing proper training to all employees. Some training may be required by regulation, but even when not legally required, proper training of employees is vital to achieving effective compliance with regulations. Start drafting your 2018 training plans now to make them most effective.
Make the Most of your People
In addition to providing proper training for employees regarding regulatory compliance, make a resolution to invest in your employees. Make an effort to cross train employees so that they can provide more efficient service to customers. You may also find that your employees have unknown and untapped talents. Perhaps you have an existing employee that is technologically savvy or an employee that can connect your bank with new customer bases.
Your bank’s board of directors is also great resource, make a resolution to tap into this resource and engage them this year.
A major theme in the plethora of expert advice to community banks seems to be to accept change and move forward with the times, instead of simply relying on same practices the bank was founded on. Sure this doesn’t mean your bank shouldn’t still pride itself in providing great customer service and caring about their customers, what it does mean is that perhaps you should show reconsider how you show you care about your clients. Make a resolution to assess the needs and interests of your community and focus your marketing efforts accordingly. Attend a community event that has gone overlooked in past years or update marketing materials to reflect current events in the community.
It is no secret that the world is becoming more digitally focused. Community banks should embrace the digital age and take steps to become more digital in the New Year. Going digital can not only help a community bank obtain new customers, it may also help them keep current customers. Accessibility is many times a key factor when person is choosing a bank. Offering features such as online banking or the ability for customers to make deposits via an app on a mobile device may make your bank significantly more attractive to customers. Not only do local customers crave accessibility and convenience, but many customers may relocate outside the community. Make a resolution this year to offer services to customers so that you can meet their banking needs no matter where they choose to reside.