BID® Daily Newsletter Archives

March 2024

When used correctly, retention bonuses can be an effective tool to help financial institutions hold on to key employees who may be looking to leave — at least long enough to find replacements. But retention bonuses are not without their flaws, so their use should be intentional and methodical. We discuss a few use cases of retention bonuses and their effectiveness.
For banks, the big three issues for 2024 are deposit growth, customer acquisition, and digital enhancement. Those three are perennial list toppers. We discuss why that is and how 2024 will shape your approach to meeting those priorities.
The gig economy is a fast-growing sector that CFIs cannot afford to ignore. We discuss some of the primary ways in which institutions can ensure they meet the needs of these self-employed customers.
When it comes to pricing deposits and loans in a competitive market, CFIs must correctly strike a delicate balance between each customer’s needs and their own profitability. Relationship pricing, based on customer profitability, can play a critical role in determining the best loan structure and deposit rates to maximize a customer’s lifetime value to your CFI. We provide insights on what factors to consider as you price products based on customer relationships, as well as the impact of adopting relationship pricing on your institution.
Private equity firms and other private investors are showing more interest in CFI deals. We detail what CFIs should consider in the event a PE offer arrives and how to prepare if your CFI accepts a PE investment.
CFIs continue to dominate agricultural lending, but lending on the whole is down and unlikely to rebound in the immediate future. We discuss why CFIs should continue actively engaging with agricultural borrowers and what they should know about the trends facing this sector.
ISO 20022, a new messaging standard by the International Organization for Standardization, enhances communication between financial institutions and customers. Benefits include improved fraud prevention, AML/KYC practices, and efficiency in payment processing. As the November 2025 deadline for compliance looms, we discuss why starting migration now is of benefit to you.
Higher interest rates and the cost burden they impose are driving a cycle of deleveraging and cash conservation at many companies. Small business owners are balancing the need to offset higher interest expenses and lessened credit availability while also addressing competing demands for strategic growth. We provide tips for how CFIs can help their business customers align their capital with their strategic plans.
Compliance under Section 1071 of the Dodd-Frank Act will likely pose the biggest burdens on the smallest institutions subject to the new rule. While there are still efforts to block it, the compliance deadline is quickly approaching. We delve into what you should know to start compliance efforts before the regulations take effect.

February 2024

02/29/2024 - Digital Academies Aren’t What They Used To Be — They’re Better
Digital academies for workplace training have been around for years, but not all employers or workers have been on board. As organizations seek to plug skills gaps internally, new approaches to digital academies are proving extremely successful.
02/28/2024 - To Convert or Not Convert Your Core
The decision to convert to a new core banking system is a monumental one. There are many reasons to make the leap so that your institution can continue to grow, though a “rip and replace” may not always be the right option. Determining whether an upgrade to your existing system could save you money, and may buy you time for even more evolved systems to come to market.
02/27/2024 - Five Ways To Shore Up CRE Lending Right Now
It’s not clear if or when the CRE market will return to pre-pandemic levels, but experts say there are steps that banks with significant exposure to the space can take to help mitigate losses. We suggest five ways to navigate the slump.
02/26/2024 - Keeping Check Fraud in Check
Despite advances in technology, check fraud is on the rise across the US. Given the significant impact on CFIs and their customers, we suggest ways in which CFIs can reduce exposure to fraudulent activity.
02/22/2024 - Is It Time To Rethink the Traditional Performance Review?
Although annual performance reviews are the norm at most companies, many employees dread the process. Changing your CFI’s approach to performance reviews and how often they happen can be the key to more effective discussions and better feedback. Read on for tips on how to optimize the review process and help employees and managers alike find more value in these meetings.
02/21/2024 - The 7 Rs of Risk Management Strategy for CFIs
The OCC recently published its autumn statement on key risks facing the federal banking system. We summarize these risks and suggest ways CFIs can mitigate them to improve their institution’s resilience.
02/20/2024 - Banking on Stability: Hedging Strategies for CFIs
Economic indicators suggest that the Fed is likely to ease monetary policy by lowering the Federal Funds Rate at some point this year. We discuss what factors could influence the Fed’s decisions and how hedging strategies could benefit your CFI in this changing market.
02/15/2024 - Spot Key Customer Triggers To Enhance Your Marketing Strategy
As expectations for personalized financial services grow, CFIs have an opportunity to peg relevant messaging to life and business events. Institutions can use starting key milestone triggers for marketing activity in near real time. We review some examples of what major triggers could be for both consumers and business customers as well as what types of products and services to market to that customer in response.
02/14/2024 - Helping SMBs Juggle Success in a High Interest Rate Environment
Although the Fed has kept interest rates steady since mid-2023 and may cut them sometime this year, they’re still the highest they’ve been in many years, and they continue to impact small businesses across all industries. We discuss three ways in which CFIs can support their small business customers as they navigate the high interest rate environment.
02/13/2024 - Using Composable Banking To Keep Up in a Digital World
Bank tech is a rapidly changing landscape. Composable banking — building banking solutions through use of multiple APIs and plug-and-play platforms — offers a way for CFIs to more easily and effectively stay abreast of the latest trends.
02/12/2024 - Rising CRE Lending Opportunities in Senior Housing
Due to an aging population, demand for senior housing is expected to grow. As occupancy rates rise and margins improve following a pandemic slump, investment in the sector should rebound. We consider the lending environment, the size of the opportunity, and what it takes for a CFI to succeed in this market.
02/08/2024 - Five Ways To Use Slower Economic Times to Your Advantage
Every economic downturn creates both pain and opportunities. Rather than scaling back or doing nothing, CFIs should consider adopting strategies that will position them for growth when the economy inevitably recovers. We discuss five places to invest during a downturn that can provide you with good return on investment
02/07/2024 - The Benefits of a Flexible Retirement Approach
The desire for more flexible work arrangements isn’t limited to younger generations. As CFIs strive to hold on to longtime senior employees who may be heading for the exit to retire, flextirement is an option that may allow them to hold onto key employees longer and ensure a smoother transition to the next generation of employees.
02/06/2024 - The Risks Lurking in the AI Shadows
Employees using unapproved, public generative AI poses a major security risk for your business. We review what shadow AI is, how it leaves your business vulnerable, and what you and your employees can do to minimize the risk.
02/05/2024 - Niche Lending: It Pays To Step Out of Your Lending Comfort Zone
Niche lending can be extremely lucrative — if executed correctly. We highlight some niche industries that are bringing success to other CFIs and provide guidance on how to identify unique, profitable niches in your area.
02/01/2024 - NFIB Survey: It Isn’t the Best of Times for Small Businesses
According to a new NFIB survey, pessimism prevails among small business owners. We discuss the challenges that small businesses noted in the survey and the potential impact on CFIs.

January 2024

01/31/2024 - New Virtual Currency Scam Targets CFIs and Their Customers
Federal authorities have issued an alert about a financial scam called “pig butchering", in which victims are lured into investing in phony schemes, often involving crypto currency. The losses can be significant. We provide tips on how to identify these scammers, if they contact you.
01/30/2024 - Bringing the Cloud Down To Earth
Cloud migration holds big promise for financial institutions. But it’s not as easy to get started with the cloud as it looks. We discuss the current state of business cloud migrations and what pitfalls and challenges to be aware of before migrating to the cloud.
01/29/2024 - Mining Data for Hidden Revenues
Without the right tools and analytical approach, customer data is unlikely to have any significant impact on CFIs’ overall profitability. But when artificial intelligence is used to help segment data into meaningful information, there are multiple ways it can be used to help organizations enhance their relationships with existing customers and boost their overall profitability.
01/25/2024 - Another Great Niche: Banking Nonprofits
More and more CFIs are courting nonprofits as customers, offering loans and other products and services. We discuss some of the unique financial needs of nonprofits and provide examples of how some CFIs are working with these customers.
01/24/2024 - Preparing for a Potential Downturn in Consumer Spending
Economists are predicting a downturn in consumer spending this year along with a slowing economy. We discuss strategies CFIs can use to prepare themselves and their small business customers for the impact.
01/23/2024 - Help Your Business Customers Get a Grip on Cash Management
A new study from Capgemini shows that business customers are increasingly in need of help with cash management. We discuss the biggest cash flow challenges for businesses and what solutions CFIs can offer those customers.
01/22/2024 - What’s the Outlook for M&A in 2024?
Bank Director’s 2024 Bank M&A Survey explores FIs’ attitudes towards M&A. Although enthusiasm for a deal is somewhat flat, stagnant earnings may motivate FIs’ management and their boards to partner with other institutions in search of low-cost deposits. We discuss possible M&A trends for this year.
01/18/2024 - 2023: We Stayed Afloat — and 2024 Might Be Even Better
Contrary to popular belief, the Global Financial Crisis in 2023 didn’t happen — and likely won’t happen in 2024. We detail topline reports summing up year-end data and share expectations for the market this year, particularly for the banking sector.
01/17/2024 - Duration Hedging as a Shield Against Rising Interest Rates
A CFI’s bond portfolio can face serious risk when interest rates rise. Duration hedging can help moderate that risk, but many financial institutions don’t use it. We review the most common duration hedging strategies to consider for interest rate risk mitigation.
01/16/2024 - Here’s How You Can Emulate the Best Companies To Work For
The Great Resignation may be over, but CFIs should still find ways to attract and retain hard-working employees — especially those who are excited to grow their careers within the institution. CFIs looking for ideas to accomplish this can emulate the 2023 winners of best banks and companies to work for.
01/11/2024 - Do You Need a Chief Happiness Officer?
Employers have begun swapping conventional executive titles with new, trendy alternatives. But it’s not just about the titles — the roles themselves are changing as well, something younger talent with a yearning for a purpose-driven culture especially craves. We explore why these new executive roles may help you get a leg up on the competition for key talent.
01/10/2024 - The Value of Reimagining Commercial Payments
Global B2B activity is poised to reach $111T in 2027, yet businesses are looking to nontraditional providers to fill their needs. Now is the time for CFIs to take a fresh look at their commercial payment services and revamp them to attract business customers with B2B needs before they land elsewhere.
01/09/2024 - Chatbots May Be Too Nice for Their Own Good
Bad actors can prey on a chatbot’s desire to be helpful, gaming its algorithms to provide access to customer accounts or financial systems. We discuss the risks of a chatbot that hasn’t been set up properly and what measures are being taken to make your CFI safer, if you deploy a chatbot.
01/08/2024 - Become Your Business Customers’ #1 Choice
Business banking is most CFIs’ bread and butter. But many businesses have more than one banking relationship. To become a customer’s primary provider, CFIs will have to develop the ability to provide full cash visibility, multibank reporting, and multibank transactions.
01/04/2024 - Get the Best Results from Fintech Partnerships
Over the past three years, nearly half of all banks formed a partnership with a fintech, and 91% of banks have said that fintech partnerships are important in driving business strategy. What factors should CFIs consider to help those partnerships run smoothly and productively?
01/03/2024 - How Should You Determine Executive Bonuses?
Finding the right amount to award your executives for bonuses can be a challenge. Compensation committees that use discretion in determining incentive payouts risk receiving criticism from investors and proxy advisory firms, whose policies tend to prefer formulaic incentive plans. However, discretion is an important feature of many banks’ annual incentive plans that, if used appropriately, can enhance the relationship between executive and CFI.
01/02/2024 - Don’t Overlook the Sensory Experience at Your Branches
As CFIs strive to make branches and in-person experiences for customers more appealing, the importance of the sensory experience should not be overlooked. We discuss why factoring in those experiences makes good sense.

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