Though far from perfect, the credit evaluation tool marks an important step forward for lenders and consumers.
With the Federal Reserve poised to raise rates, bankers need to model and prepare for their exposure to time deposit early withdrawal.
Rather than bidding up rates to retain CD deposits when they mature, bankers should consider offering customers a special purpose savings account that offers CD-like yields.
Banks should begin strategic planning for their time deposit portfolios now – before interest rates rise and CDs resume their historic importance as funding sources.
While bankers cannot yet foresee all the regulatory fallout from continued investigations of overdraft fees, they can begin planning now for a more sustainable approach to fee income.
If banks want to emulate the ability of alternative providers to make consumer or small business loans quickly, they should focus on speed to the conditional approval.
A bank’s financial performance tomorrow depends on pricing decisions today. But if projections about tomorrow are false, today’s pricing decisions will be flawed.
Lagging behind credit unions and alternative lenders, community banks need to get back into consumer lending by focusing on technology, front line sales and partnerships.