CARM-Pro™ user-friendly software also provides enhanced executive-level tracking and reports that support your bank or credit union leaders’ efforts to develop and enforce banking strategies for growth. Then CARM-Pro™ will execute efficient workflows and sequencing of all required compliance steps. Collectors can leverage the power of CARM-Pro™ debt collection software to automate much of the manual labor of collection work. This website uses cookies and third party services. Companies: Our Global Banking business works with virtually every company in the S&P 500. Community banks are more dependent on deposit fees compared to larger institutions and this makes them vulnerable to a transactional model where consumers acquire low margin products from their primary bank but use specialized providers for high-margin products, such as investments and loans. Another is to create new … For example, the concept of “neighborhood marketing,” pioneered by Umpqua Bank, is based on embedding local micro-market strategies into the marketing and sales process, which can significantly reduce customer acquisition cost. 1. CARM-Pro™ automatically records all actions taken by each collector, by date and time. Simple presence in the community doesn’t automatically create gravity and attraction – that requires more focused programs. BAI is Bank Administration Institute and BAI Center. We see continued growth in our digital and mobile channels, with 37 million digital banking users; nearly 27 million are active mobile banking customers. IBS pioneered customizable debt collection technology to solve the critical challenges of increasing bank profitability, growing loan volume, and reducing risk for all financial institutions. Integrate your current banking policies, compliance strategy definitions and requisite collector actions to CARM-Pro’s unlimited database, and leverage full or collector action initiated work flows. This includes discussion of market penetration, market development, product development and diversification together with evaluation … The lower acquisition cost is not just an end in itself, but it also allows for re-allocation of investment to future digital growth strategies. In our survey, 78% of respondents reported that improving sales skills was their bank’s primary strategy for growth. This proven software’s comprehensive … Low interest rates continue to put pressure on margins. But that tide is changing. Sales effectiveness is not just a function of knowledge, but also of discipline and coaching. Indiana, Penn.-based First Commonwealth Bank re-entered the mortgage business. Fifty-five percent of the owners of small and medium sized enterprises are willing to consolidate their personal and business relationships at the same financial institution, according to a BAI Research report. The bank of the future will have specialists who can call on business accounts and regularly pop one million-dollar checking account after another. BAI © 2020 All rights reserved. Furthermore, branches are becoming smaller. Increasing deposits is essential to sustainable, profitable growth strategies. Executive managers and board members are typically uncomfortable with lowering their institution’s credit approval standards. The first is for a bank to use its internal data more effectively for its own operations by adding new analytics capabilities. Most bankers understand that excellence in operational process is best achieved by consistency. Lower credit scores can also lead to high delinquency rates.  When financial institutions lower their standard for credit approval in conjunction with enforcing more aggressive collection policies on new loans, they can minimize delinquency risk by leveraging powerful CARM-Pro™ debt collection technology.  CARM-Pro™ ensures consistent follow-through with frequent, multi-channel debtor communications that lead to faster loan repayment. With compliance seemingly always at the forefront, policies … That translates into fewer natural sales opportunities. As one C-level banker stated in response to our recent industry survey, “What we’re doing now isn’t working anymore; we have to take a different approach.”. This boosts productivity so much that it frees collectors to work prior charged-off accounts – thus increasing bank profitability by recovering non-interest income. In addition to reducing process costs, automation tools can help improve staff … However, as the economy strengthens, these gains may be offset by competitive pricing pressure. If bank financing isn’t possible, you’ll need to use your own internal funding. Staging of customer traffic patterns, merchandising placement and teller referrals were keys to a robust sales process. Attack is the best form of defence, and growth strategies may help banks to remain competitive in a fast-moving and rapidly-changing financial services landscape.   Lending to clients or members with low credit scores can result in greater delinquencies, but financial institutions can minimize this risk by leveraging CARM-Pro™ to enforce more aggressive debt collection policies. Editor Note: David Kerstein has updated this article. The Right (and Necessary) Policies. The few “experience leaders” emerging in retail banking are generating higher growth than their peers by attracting new customers and deepening relationships with their existing customer base. Banks need to re-establish the branch as a destination, a place where people want to go versus a stop for an infrequent errand. But achieving that growth is a difficult challenge. In a rising rate environment that is coupled with strong economic growth achieving deposit goals is the best way to … The type of growth or expansion options you choose will dictate your potential funding options. Many banks have recognized that they need a truly differentiated … Standardized neighborhood marketing programs build on micro-market analytics to focus the right tactics on the right trade areas. The road ahead cannot be a matter of, “train them on products and let them figure it out.”. However, there is a tendency to think that consistent process in customer conversations somehow indicates a “robotic” interaction. Financial institutions are simply unable to charge for services that were once common sources of profit. They are large enough to acquire the necessary talent pool, but small enough to create a “one-bank” model that avoids the silos that impede larger financial institutions. Collectors can then efficiently customize and schedule all debtor outreach via automated, tracked and recorded delivery of email, postal mail, SMS and dynamic voicemail. At the same time, encouraging non-branch transactions increases interchange fee income and helps offset declines in OD and other miscellaneous fees. To get the most out of growth, banks need to define what growth they want, how much-increased risk they are willing to take and how to allocate resources to accomplish that required growth. The sold, insured, and guaranteed loans that your bank or credit union maintains are under more scrutiny than ever before. It also decreases risk by not compromising the frequency of follow-up communications with delinquent debtors. Collectors gain a comprehensive 360-degree view of all borrower accounts, including the status of delinquency and data from their institution’s primary servicing system, which saves time and ensures compliance. During the go-go 1990s and most of the 2000s, too many bankers pursued indiscriminate growth, had a broad appetite for risk and … One powerful tool to enhance value is to identify account “twins” and consolidate them into a single, higher value relationship. Full automation of collector actions and borrower outreach allows banks and credit unions to increase loan volume and process required collections steps faster, with the same or fewer staff members. Early analysis suggests potential reductions in OD revenue in the range of 25% to 50%, with the impact beginning in late 2016. … Banks are hungry for growth: hungry for new customers, for deeper and more profitable relationships with existing clients and for better alignment of expense against revenue opportunities. You can also raise external … Change the customer conversation. 100% Committed to Bank and Credit Union Collection and Recovery, Home » Banking Strategies for Growth: How to Grow Income & Reduce Risk. Furthermore, the “no fee zone” is expanding. We believe community and regional banks have a unique opportunity to leverage a diversified financial services model. There are barriers to the development of … Fewer customers are visiting branches as routine monetary and service transactions migrate to other channels. CARM-Pro™ diligently enforces your financial institution’s strategy by enabling your collectors to store and leverage the data you require into unlimited inclusion and exclusion debtor selection parameters (for any action – communication, work list, etcetera) within CARM-Pro™. Sean C. Payant, Ph.D., is Chief Consulting Officer at Haberfeld Holdings, a data-driven consulting firm specializing in core relationships, customer, and profitability growth … This scalable, user-friendly software also allows for unlimited collector assignments, and quickly adapts to enforce changes to the ever-changing economic environment, policies and regulations that affect your debt collection and recovery strategy. In-depth conversations with the senior leaders on the topic, “What is our core business?”, is the preferred starting point.An evaluation of the overall performance of the core business follows. This empowers collection agents to fully comply with your institution’s policies, as well as state and federal regulations, to minimize the risk of non-compliance. New Bank Strategies Require New Operating Models Disruptions in banking are pushing banks to take more explicit strategy decisions. These prospects are “findable” in that targeting strategies can locate prospects with a high potential for consolidation. 4 The future of growth and the banking industry In the complex environment that defines the banking industry, the simple fact remains that strong customer relationships are still the most important contributor to a bank’s growth … There has long been a disconnect between the willingness, even preference, of customers to consolidate multiple relationships at their primary financial institution, and banks’ ability to effectively execute strategies that accomplish this. Collection steps that are missed, performed late, and improperly documented can lead to fines, penalties, and litigation losses for your financial institution. Historically, banks used direct mail to generate inquiries and branch lobby management to drive sales. Finding topline revenue growth is the core issue facing the industry, and this begs for new pathways to success. Scalable CARM-Pro™ empowers bank & credit union executives to proactively implement bank branch growth strategies. The consulting firm encourages banks to better evaluate... 2) Increase productivity using … Although conventional wisdom commonly warns of the death of retail banking, community banking is alive and well… but could be doing much better. According to the … The grass isn’t always greener on the other … A framework is presented for thinking about the various avenues through which banks can pursue growth. Yet, we know that the majority of balances are not consolidated. Tools exist to predict how customers will value financial products, and what price they are willing to pay, with a high degree of accuracy. For example, earlier and more frequent outreach, via the debtor’s preferred method (email, SMS, voice, or USPS) helps increase net income by reducing delinquencies, preventing some loan charge-offs, and lowering operating costs. CARM-Pro™ debt collection and recovery technology by IBS is the sought-after solution for banks and credit unions seeking better banking strategies for growth. In the contemporary banking environment, state and federal regulators increasingly emphasize collection compliance. Every bank and credit union develops clearly-defined lending standards. Any reduction of credit standards typically raises concern among executive management. However, increasing loan volume by lending to borrowers with lower credit scores yields a higher interest spread, thus more interest income.Â. The opportunity is compelling. In our perspective, A Profit Growth Strategy for Small Business Banking, we detail a new strategy to grow share in this high-profit segment by effectively targeting the competition's best customers, … Customers are already migrating toward self-service channels, but the most expensive channel, the branch system, remains the primary point of contact. CARM-Pro™ Collection and Recovery Manager – Professional™ is a dynamic debt collection system that maximizes your collections team’s productivity, enabling them to work more past due accounts than ever before. Efficient workflows and automated outreach allow for earlier and more frequent debtor communication. CARM-Pro frees up time for collectors to work prior charge-offs and recover non-interest income that increases bank profitability. Collector workflows automate customized borrower outreach, to encourage faster payment and ensure that no communication steps are missed. Shifting customer activity out of the branch reduces cost-to-serve, improving product profitability. Most bankers understand that excellence in … It makes them more efficient to operate, but also means they lose the marketing “billboard” impact of a large facility. McKinsey recommends that banks: 1) Improve risk management with powerful analytical tools. In addition to the financial fallout, COVID-19 is reshaping the global banking industry on a number of dimensions, ushering in a new competitive landscape, stifling growth in some traditional … Utilize data analytics to improve fundamental product economics. The best way to mitigate risk in banking is to leverage CARM-Pro™ to enforce your financial institution’s policies and protect the integrity of your banking process using automated debt collection software. Â. He can be reached at [email protected]. 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