There is so much going on these days and people are so worried about hanging onto their jobs, a new study finds about 1 in 10 workers in the US take some of their work home on a typical workday. The most common reason stated was to finish the task or catch up. We don't know about you, but given all the pressure on the banking industry, we would venture to say the numbers are most likely at least double that percentage for bankers.
We were also intrigued by the results of a survey by USBanker that asked bankers what they expected to do to generate earnings in coming quarters. Virtually all of the community bank executives we speak to are trying to figure out what to do to "retool" their business model in this ever-changed world.
Looking at that survey, it was interesting to note that the single biggest response at 54% was that no moves would help very much until jobs and the housing markets bounced back. That response was far and away the single biggest, blowing away #2, which was "all of the above" at 20%.
Coming in at the 3rd position was to hire revenue producers and invest in promising lending niches at 12%. This is indeed an opportunity, but bankers should also be reminded that regulators look closely at any new product line you might enter into to be sure adequate seasoned staffing is around to deal with nuances that invariably surface when expanding into new ventures or lending channels. Make sure you have the expertise, documentation, systems, policies and procedures in place and ensure proper vetting has occurred analyzing the risk/reward tradeoffs (including stress testing and the exit strategy) up front. There is no substitute for having highly qualified staff for any new lending area you may want to pursue.
Tied for 4th and 5th position at 7%, bankers said they were focused on cutting more expenses; trimming rewards; raising fees; and fighting to win key lobbying battles. Here, bankers are analyzing which products and services simply might not make ongoing sense due to low adoption rates, high costs or a risk/reward profile that is out of kilter. Branch sales are expected to pick up in the coming quarters, as bankers look to restructure some delivery channels, leverage technology and seek out smaller footprints to save money. It goes without saying that care should be taken when cutting costs, but this is nonetheless a key area bankers will have to address to create a leaner and meaner corporate structure and survive into the future.
Nearly all bankers we know are actively discussing the impact of Dodd Frank and other regulatory changes on the overall business model in meeting after meeting, so you are not alone. Unfortunately for all, there are no easy answers, so costs must be maintained, new revenue options should be explored and good old fashioned banking principles should be maintained until things settle down further and stronger economic growth appears. Working to ensure your best customers are happy, higher coupon loans are reviewed for potential prepayment and working deposit costs down are all part of the process. You don't always have to take work home, but these are tough problems to solve, so don't worry too much if you end up doing just that.