Banc Investment Daily

Digital Cash = More Cyber Criminals

May 23, 2017 -  About 25% of Americans say they now conduct most of their transactions in cash vs. 36% who said so 5Ys ago, according to Gallup research. Interestingly, while 10% say they make all of their purchases with cash (vs. 19% 5Ys ago), about 41% say they make some of their purchases with cash (vs. 33% 5Ys ago). People are adjusting their cash usage it would seem as demographics take hold and people shift toward electronic payment methods over time. For some crooks, all of this electronic money movement is a dream, and community banks like other banks are still juicy targets. Banks...

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Recent Issues

May 22, 2017  -  Faster Business Speed

The world has definitely changed over the past few years as things have really accelerated. Look no further than research by Forbes Insights that finds 82% of customers will conduct product research online. Once that work is completed, 75% of these same people according to research by McKinsey expect "now" service within 5 minutes of making contact online. This is the world we live in; speed in all things is now a way of life it would appear. In banking, small business owners also want speed and great service when they are looking for a loan. This group also has higher...

May 19, 2017  -  Of Growth And Efficiency

We found it interesting that Amazon guru Jeff Bezos is now reportedly worth just over $60B. That makes him about $5B shy of becoming the richest man in the world according to Bloomberg. As if that weren't enough to make your head spin, consider that Amazon itself has grown so much that its market capitalization is now twice the size of Walmart. Put another way, Amazon is 2x the size of Walmart in value. That is a lot of growth over the past 20Ys. Speaking of growth, things are a bit different over in the banking industry where regulations and restrictions...

May 18, 2017  -  Branch Closures - Do You Need Them?

ABA research finds 71% of baby boomers use online banking services at least 1x per week. This is on par with both Gen X and Gen Y. This is extremely important to community banks, who know that boomers also control about 67% of all bank deposits. Given the shifting nature of technology and the way people keep learning and changing their behaviors, should community banks be thinking more aggressively about closing branches? Certainly, community banks pride themselves on maintaining the sort of "high-touch" personal relationships with their customers that larger rivals struggle to offer, despite their deeper pockets and their technological...

May 17, 2017  -  Competition And International Opportunities

McKinsey research finds that 10% to 40% of bank revenues (depending on business line) could be at risk from financial technology (Fintech) players by 2025. That is just 8Ys from now and it indicates community banks will need to keep refining the business model and adapting to customer demands in order to maintain a strong foothold. Certainly, competition is on the top of everyone's mind these days, as it seems to be coming from everywhere. One way to manage competition is to broaden your target market - even outside US borders. These days, many small business clients have or are already...

May 16, 2017  -  Measuring Regulatory Relief

Researchers at New York University and Michigan State University have reportedly figured out a way to easily fool fingerprints digitally by creating artificial master prints that can open up smartphones up to 65% of the time. These master keys if you will are a spooky concept because they demonstrate how bad guys might also break into biometric safeguards that are being used more and more by banks. It just goes to show that for every countermeasure there seems to be a new workaround that quickly follows in this technological world around us all. Speaking of measures, in the banking industry the...

May 15, 2017  -  Leveraging Technology To Streamline Exams

As we read through a recent research piece by McKinsey, an interesting sentence caught our eye. It read: In the eight year period between the Netscape IPO and the acquisition of PayPal by eBay, more than 450 attackers - new digital currencies, wallets, networks, and so on - attempted to challenge incumbents (in the banking industry). Fewer than five of these challengers survive as standalone entities today. It seems that the banking industry with all of its rules is a tough one to disrupt. That doesn't mean bankers can rest idly however, because technology is beginning to take hold, so...

May 12, 2017  -  Automated Everything

The Boston Consulting Group projects 25% of miles driven in the US by 2030 (just 13Ys) will happen in self-driving cars. That makes some sense, when you consider autonomous vehicles can reduce travel costs by a projected 60%. Who knows, perhaps the next car you buy could be your last one, so choose wisely and enjoy it. That is a huge change in a short period of time. Speaking of huge changes, you have most likely heard that Bank of America has opened three mini-branches that have ATMs and videoconferencing - but no human bank employees. They call these automated centers...

May 11, 2017  -  Community Banker Count Down To The Brexit

A study by eMarketer finds Amazon's Echo and Echo Dot speaker devices have a 70.6% marketshare in the US followed by Google's Home device with 23.8%. That means everyone else in this space is fighting for the remaining 5.6%. That is a long way for competitors to go to gain on these two juggernauts. Speaking of countdowns, community bankers should note that the Brexit countdown has officially begun overseas. As expected, on March 29th, British Prime Minister Theresa May sent a letter to the President of the European Union (EU) indicating Britain's desire to leave the EU. This officially triggered...

May 10, 2017  -  Traveling Around the Industry and Beyond

Did you see the story that quoted renowned theoretical physicist Steven Hawking? He originally said the human race had about 1,000Ys to populate another planet or risk facing extinction, but has now moved that up to a mere 100Ys. He points to overdue asteroid strikes, climate change, epidemics and population growth as likely catalysts. We better get going soon because building a base takes time and we have to account for travel too. Approximate travel times: Moon (3 day trip), Mars (7 months), Venus (15 months), Jupiter (6.0Ys) Mercury (6.5Ys), Saturn (7.0Ys) and Uranus (8.5Ys). While traveling in outer space is...

May 09, 2017  -  Managing Vendor or Third Party Risks

In 2008, regulators introduced a concept banks know as third party or vendor risk (vendor risk). This concept came from lessons learned during the credit crisis and has come to encompass not only mortgage foreclosure activity conducted by third parties, but also consumer compliance, cyber risk and today includes all products, processes, systems and services supported by a vendor relationship. These vendor relationships include outsourcing, using subcontractors, independent consultants, networking arrangements, services provided by affiliates and subsidiaries, joint ventures, and other business arrangements in which the bank has an ongoing relationship or may have responsibility for the associated records and...

More Back Issues

About the Banc Investment Daily

The Banc Investment Daily has been published in various forms for over fifteen years. This daily newsletter reaches an audience of over 25,000 people employed by financial institutions and regulatory bodies and has become a staple in the morning reading routine for bank executives nationwide.

The BID is a compilation of news, facts and opinions focused on issues vital to financial institutions. In addition to the newsletter, BID content is syndicated to financial institutions and trade associations throughout the country and has appeared in major financial publications such as the American Banker. Issues often contain:

  • Important bank-related news
  • Tracking of sales and merger multiples
  • Economic commentary and Federal Reserve actions
  • Recaps of the fixed income and bank loan markets
  • Discussion of regulatory and compliance issues
  • Ideas on performance and risk management

The History of the Banc Investment Daily

About 20Ys ago, we had the idea to create a daily publication designed specifically for community bankers. While it has been refined over the years, it has stood the test of time. In fact, each week we add a few hundred new bankers or regulators to the distribution list of the Banc Investment Daily (BID) and readership is over 55,000. Given that growth, every few years we stop to take a moment and explain the intent of each specific area within this publication in an effort to help community bankers. We do this to help make sure all of our readers can effectively utilize everything the BID is designed to deliver each and every morning.

First and foremost, the BID is 100% focused on community bank issues and designed to provide thought-provoking information. It is always presented in an easy-to-read single page format, with a bit of humor sprinkled in here and there. It has never been longer than 1 page in length, so every single space within that page is maximized every day.

The creative process is unique, as it begins around 4:00am PT and ends promptly at 5:00am PT for delivery to your inbox each morning. That provides time to create, edit and refine things and ensures it gets out to everyone just in time for that 1st or 2nd cup of morning coffee no matter your time zone.

Topics come from a variety of sources, including bankers themselves (one of our favorite sources—although once again we go on record saying we have not put listening devices in anyone‹s boardroom); regulators (from conferences, face-to-face meetings, video conferences, etc. — but always anonymous); industry experts (these can run the gamut from banking attorneys, accounting firms, technology and others—as long as they have a specialty in community banking) and from our own research.

The BID basically breaks down into two major sections. The first is the left side of the page (which we internally refer to as the "Top Left"), and it usually ends at the top of the next column. The rest of the publication is identified with headers describing what you are about to read.

The Top Left is basically our "idea of the day." The primary goal of it is to keep things fresh by putting a new spin on an old idea, getting you thinking, alerting you to upcoming regulatory issues, spreading the word or educating. Creating this section takes about 2 hours every single day and that includes tying it back to a random (and seemingly unrelated) picture as a critical part of the process. In this section, sometimes we start with a nascent idea (oh yea, we also try to sprinkle in at least one big word to keep everyone‹s vocabulary sharp) and then find a random picture that seems to work with it. At other times we challenge ourselves by creating an idea after selecting a picture.

Believe it or not, the rest of the publication takes just as long as writing the Top Left. To make sure bankers stay on top of things, we focus on issues that have impacted market yields or major economic data points that could affect your business, loan or deposit pricing for example.

The News section is all about highlighting important news and events that could impact community bankers. To do this part, we scour hundreds of sources, weed out only the best few and make sure you know about them so you can stay on top of things quickly and easily.

Finally, the rate box comes into play. This grid contains a list of Treasury yields along with their monthly and YTD change. This is provided so you can keep track of your mark to market and better manage your loan/deposit pricing for various maturities. Also in the grid we include LIBOR swap rates. This is included since it is the de-facto funding level for large banks worldwide. It gives you a way to quickly check your deposit pricing for various maturity structures or to price loans. Next you will find the expected federal funds (FF) rates. This comes from the futures markets each day and it gives you an idea of where FF are actively trading so you can project where they may be heading in the future.

Also in the grid at the bottom running across, we give daily updates on the current overnight FF rate, the FF target rate, the discount rate, prime, the unemployment rate and the price of oil.

In closing, we are proud to say we have not missed a single business day of the past 4,000+ creating and distributing the BID and we thank you for your readership.

The Banc Investment Daily is a targeted newsletter specifically created for independent financial institutions.
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