Maximizing Profitability Across the Organization in Bank Strategic Planning

Posted in by Matt Harrell

Among the many different strategic objectives faced by bank executives, profitability is typically top of mind, particularly for CEOs and CFOs. As arbiters of the bank’s profitability, however, how do bank CEOs and CFOs get alignment from other functional groups like IT, Marketing, and Retail who may have different priorities? This is a perennial issue at many banks, particularly during strategic planning season.

The good news is that our team works with many executives who are effectively identifying, quantifying and prioritizing areas of profit opportunity at their banks. The way that they’re gaining alignment across the organization is by marrying their financial performance metrics with digital transformation. This not only allows the bank to focus on activities that improve profitability, but also gives teams like Marketing, Retail and IT the ability to focus on product offerings that could help capitalize on this opportunity.

Let’s review a scenario that one of our clients recently faced:

The bank in question used our FIN Advisor product to identify their top profit opportunity theme as Loan Growth, representing over $12.5 million in cost relative to banks in their Strategic Peer (banks that operate similarly as identified by our analytics) group.

Our FIN Advisor tool has a color-coded interface that is easily interpreted by functional areas not always focused on Net-Interest Margin or Yield Curves. But where this bank was able to gain alignment like never before with the Marketing, IT and Retail teams was by using FIN Advisor’s Offering data. FIN Advisor recommended that this bank implement an online loan application solution. As it turns out, a whopping 67% of their peers were offering this to their customers.

Now, this bank has their Commercial team investing in new training for their loan officers while the Marketing, Retail and IT teams are evaluating online loan origination vendors using FI Navigator’s vendor analytics to find the best fit.

It’s exciting to see the new opportunities that advancements in analytics are providing to bank executives. Our team continues to push the envelope on ways to enhance bank strategic planning through the combination of advanced peer metrics and never-before-seen product offering data.