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A modified version of this article was originally published in BAI Banking Strategies on November 13, 2015.


As the Millennial generation increases its economic clout, banks need to adapt strategies that enable them to profitably attract, serve and grow with these new customers.


It’s a simple fact: Millennials are your future customers. Already the largest group in the workforce, the leading edge is now in their 30’s and reaching an age when they have stable jobs, are forming families and buying homes. By 2020 they will have greater savings and investments than Baby Boomers. They are not just a customer category, but a massive segment that is driving change rapidly.


And Millennials are critical to your bank’s growth strategy. Approximately 10% of households switch banks annually – a rate that has been relatively stable for the past decade. But this propensity to switch varies widely by age group. Older customers are more likely to have long-established banking relationships and their average switching rate is only between 3% and 4%, usually as the result of a service or moving issue. On the other hand, younger customers switch at a rate of between 15% and 20% annually. They are most likely to be attracted to financial institutions that offer the technology and online services they prefer.


Banks need to take action or risk losing this segment to new entrants in the payment, consumer banking and business banking space. And there is cause for concern: we counted 38 different non-traditional competitors in the payments space alone, of which 10 were new in the last year.


Up to now, these competitors have been mostly nibbling around the edges, but the introduction of Apple Pay significantly heightened awareness of the threat. In our recent industry survey, one bank CEO told us: “The fear is that Apple Pay and Google Pay reduce, if not eliminate, the need for banks to provide the payment stream. How do we compete with that? …. Not sure what the solution is at this point. Once the consumer leaves or never comes in to the system, will they ever join again? Jury is out but I am not optimistic.”

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This article was originally published in BAI Banking Strategies on October 23, 2015


To avoid the revenue growth squeeze, community banks need to embrace neighborhood marketing, improve sales effectiveness, expand customer relationships, utilize data analytics for product design and diversify their offerings.


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. But achieving that growth is a difficult challenge.


Low interest rates continue to put pressure on margins. According to the most recent FDIC Quarterly Banking Profile, “revenue growth has been modest and net interest margins continued to decline.” Although interest rates will inevitably start to rise when the Federal Reserve raises rates and this will help loan yields, it will also trigger competitive pressure on deposit rates, limiting improvement in the margin.


Furthermore, the “no fee zone” is expanding. Financial institutions are simply unable to charge for services that were once common sources of profit. Overdraft (OD) fees have been severely constrained, and the situation will only worsen as new regulations from the Consumer Financial Protection Bureau further limit this important source of revenue. Early analysis suggests potential reductions in OD revenue in the range of 25% to 50%, with the impact beginning in late 2016.


Finding topline revenue growth is the core issue facing the industry, and this begs for new pathways for success. 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.”


Here are five suggestions for such a different approach:

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Peak Performance Consulting Group recently conducted a survey of financial services executives to gain their perspective about the challenges ahead for the banking industry. Respondents highlighted the difficulties facing community and regional banks, including pressure on margins and fee income, the high cost of regulatory compliance, increased competition from nonbanks and changing customer preferences that are making branches less efficient.


SNL recently interviewed us about threats, opportunities and challenges. free-link. You can find the original survey at http://ppcgroup.com/resources/insights-and-downloads.html


This article was originally published in BAI Banking Strategies on September 15, 2015


As customers migrate to digital channels, bankers need to aggressively re-configure their branch networks in terms of the number and mix of facilities, the staffing provided and the role of the contact center.


Perhaps the single most important threat facing the banking industry is the fundamental change in the way consumers and small businesses use branches. Routine service transactions are being displaced by online and mobile, causing branch transaction activity to decline at a 4% to 5% rate per year on average, with some banks such as SunTrust, experiencing declines of 8.5%. And sales productivity is low: our client benchmark data indicates the average branch opens 20 to 30 new accounts per month, and that translates to only 1 to 1.5 accounts per business day.


The steady change in channel behavior has left many bankers uncertain about how aggressively to respond. In our recent survey of industry leaders, one senior banker said, “There is still a lot of disagreement within the industry and our bank as to how quickly the shift from physical to digital is taking place. That is leading to a hesitation about committing resource investments, which could be a huge stumbling block for the prosperity of the industry longer term.”


Here are some suggestions for revamping your distribution model to evolve with the changing customer trends:

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 Despite widespread predictions that interest rates would rise, the Fed left them at near zero where they have been for the past seven years. Fed officials predicted that the benchmark rate would rise gradually, reaching 2.6% by the end of 2017. While rates are bound to increase eventually, when they will rise is far from certain. It’s not just the U.S. economy that impacts Fed policy but also unpredictable world events that threaten growth: Ukraine, China, European refugee crisis.


Looking forward to 2016, rates may inch up but they will most likely remain low and margins will be thin. Rising interest rates will improve loan yields – good news for asset sensitive banks. But as the Fed raises rates, banks, money-market funds and other savings vehicles are likely to start offering higher returns, creating competitive pressure on deposit rates and limiting expansion of the net interest margin.


Finding topline revenue growth is the core issue facing the industry, and this begs for new pathways for success. In our recent industry survey one respondent put it succinctly: What we’re doing now isn’t working anymore. We have to take a different approach.”


What will propel the industry to pre-recession earnings? Financial institutions can improve earnings by using advanced customer analytics to optimize pricing and services.


Analytic tools exist to predict consumer how customers value financial products, and what price they are willing to pay, with a high degree of accuracy. These tools can help identify specific fee, balance and service combinations that customers prefer. A large regional bank used data analytics and market research to successfully restructure checking account pricing, resulting in a net increase of over $100 million in revenue. Similar tools are available to smaller banks, and can have a significant impact on earnings.


Additionally, financial institutions can encourage more profitable customer behaviors – more profitable channel usage, more profitable transaction activity, and greater incentives to encourage consolidation and relationship depth. Whether rates rise or remain flat, these are important strategic initiatives that should be embraced.



Bank-at-Work has proven to be an effective channel to acquire new clients, deepen existing relationships and generate incremental revenue. But fully leveraging the channel requires that bank’s maintain a cohesive structure around their workplace program. Get best practice tips to improve your existing program, or jump-start success for new programs. Get expert advice from Paul Corrigan, perhaps the leading expert in developing, implementing and managing Workplace Banking programs.


Register here and use Offer Code PPCG20%off


Key Points:

  • How Bank-at-Work generates revenue growth and complements branch based sales programs.
  • How Bank-at-Work is a group sales model and puts bankers in front of prospects and customers they no longer see in branch
  • Define the components that drive incremental revenue and provide growth.

Key Takeaways:

  • Understand the dynamics behind best-in-class workplace programs and amount of new business they generate.
  • The impact of inadequate program structure; error’s that will impede your workplace initiative.
  • Checklist of “Top 10 Tips” to ensure that your Bank-at-Work program is successful

Who Should Attend:

  • Community Bank Executives
  • Retail Directors
  • Sales Managers
  • Marketing Managers
  • Branch Managers

Learn From the Expert:

  • Paul Corrigan’s expertise with Workplace Banking includes 18+ years’ experience in program implementation and channel management at Citibank and RBS Citizens
  • Paul’s experience includes working with community and regional banks in the U.S., and with international banks in Canada, ,Europe, Latin America, and Europe

How to Register and Special Offer: Register here and use Offer Code PPCG20%off


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