Since the conclusion of the 2008 financial crisis, the financial services industry has left its “crisis-response mode,” but we’re not in the clear yet. Many institutions emerged with their balance sheets in different stages of health. Though the economy continues to grow, we need more than a one-size-fits-all solution to get back on track. More than 10 Read More
More than 25 years ago, Bill Gates declared: “Banks are dinosaurs." I would argue that the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 is quickly reducing them to fossil fuel status. In his first 100 days in office, Donald Trump acted on his campaign promise to dismantle Dodd-Frank by signing an executive order that Read More
The Financial Accounting Standards Board (FASB) is expected to release the final standard of the current expected credit loss (CECL) model in the first half of 2016. This model changes the guidance for the way banks account for their allowance for loan and lease losses (ALLL) and will include, among other provisions, forward-looking requirements, a longer loss Read More
While bankers have generally become more sophisticated in their understanding and execution of profitability analysis, all too often, they are limiting their potential for success by failing to utilize tools such as funds transfer pricing (FTP) to their full capabilities. Many bankers are already familiar with FTP, often leveraging it to measure the net interest margin at Read More
In today’s sluggish economy, banks are looking under every rock for cost savings in order to show better earnings growth. One source of expense control, however, has been hiding in plain sight: the cost of courier services. With Branch Image Capture (BIC) and Remote Deposit Capture (RDC) technology, physical copies of checks are no longer necessary to Read More
Internal inefficiencies, such as siloed systems, redundancies and downtime, have a negative impact on banks of any size. With fewer resources to develop and implement processes to offset these inefficiencies, smaller financial institutions face a particularly steep uphill climb. For the more than 5,800 community banks in the U.S. that have fewer than 300 employees, successfully streamlining Read More
In December 2012, the Financial Accounting Standard Board (FASB) proposed a new current expected credit loss (CECL) model. With it came a number of changes and controversy, as institutions recognized the potential of an increase in allowance levels as a result of the changes to how losses are estimated. While many institutions, associations and firms submitted comment Read More
How can banks remedy their low-growth performance compared to other sectors of the economy? By taking a cue from financial services companies that have outperformed their peers. Defined in terms of growth in total shareholder returns (TSR), the clear outperformers are Capital One, Wells Fargo, and U.S. Bancorp. While the 13 other listed U.S. retail and commercial Read More
Having worked both as a banker and as a bank consultant for over 20 years, I can testify that this current period seems among the most negative work environments I have ever witnessed. Many bankers now act more like hedgehogs than leaders, operating out of a defensive crouch rather than putting themselves or their ideas forward. When Read More
Most financial institutions take an iterative approach to their budgeting process – running through multiple passes and scenarios before finalizing. We have seen the most progressive institutions take their budgeting practices to the next level by running stress scenarios as part of this iterative process. Given the risks facing financial institutions due to anticipated rate increases, which Read More
