Really Stupid Things Smart Bankers Do

Even though it was 20 years ago, I remember it like it was yesterday. One of the attendees at a bank CEO conference came up after my speech and began to lecture me. “There’s one distinction you’re missing, Roxanne. We bankers, we’re like sheep. The first one marches up to the ledge and falls off, and the rest march in step screaming Baaaaaahhhhh! as they fall one by one over the ledge. You have to stop believing bankers actually think for themselves!”

Since then, I’ve watched that scenario play out too often. “Geez, let’s all get a bank into a grocery store before somebody else does. No time to do a profitability analysis. Let’s mortgage homes at 105 percent… that will be fun. Hey, anybody for a behemoth amount of brokered deposits? That’ll be easier than teaching our people to not be order takers, eh?”

What’s the next crazy thing that will have the wolves at the bottom of the canyon salivating?

My prediction: it’s buying distressed banks. It’s the lazy man’s way to grow a bank. And along with it comes a capital drain, asset problems to tie up your ability to prosper for years, us-and-them wars between the merged teams stifling your ability to move forward for two years, to say nothing of the lowered safety rating just when customers are all becoming experts on bank safety!

So how do you grow in a time when loan demand has shriveled up?

It’s time to get wise. A recent new client of ours made capturing more low-cost deposits their top initiative. They had been at 120 percent loan-to-deposit. Ouch. Within four months, the CEO called and said, “Hey, that really worked. Now show us how to do this to get loans to keep up with our deposits!” If they can do it, so can you. How?

Follow these five steps:

1. First, take your culture up 20 notches. If customers aren’t raving, that’s right, RAVING about you, nothing else will work. Your employees’ passion to be extraordinary must visibly show. Until this is remarkable, don’t move on to step two.
2. Identify the 100 ideal prospects that you will become unstoppable at attracting. Create a lesser approach for your top 1000 list. Start your “give” campaign.
3. Bring up the skill sets of your selling team. I guarantee you that no matter how good they are, they’re not even one third of the way there. If they EVER say they can do the deal as long as they can match the rates, you have a lack of competencies that must be addressed aggressively.
4. Get massive. You have a limited time when there is bad news about a competitor in the area to easily sweep up all their best customers and employees, so you’d better have your culture and skill set ready to go BEFORE that happens.
5. There will be more opportunities as other banks go over that cliff. Sad for them, great opportunity for you. As you watch sheep dropping from the sky, simply repeat the five steps!

Good points, you say. This makes sense. But dang, your people don’t really know how to capitalize on this. Why isn’t it working? Because there are five whoppin’ hurdles that make it feel like that dream where you are being chased but your legs won’t move.

photo credit: steffofsd