Vendor Spotlight: Optimize Your Growth in 2018
Editor's Note: The following article was written by Richard Miller, executive vice president of John M. Floyd and Associates. JMFA is a LBA Associate Member and you can find more information about them in LBA's Associate Member Resources Guide.
Focus your efforts where you can get the best results
Buoyed by on-going economic recovery, low unemployment, increased consumer confidence and possible reduction in regulatory activity, the stage is set for banks to grow in 2018. According to the Independent Community Bankers of America 2018 State of Community Banking Survey, (click here to read the article) 66% of respondents have set growth as a top priority for the year. This includes 22% who plan to increase earnings, 20% who are looking forward to additional loan volume and 11% who anticipate deposit gains.
Look beyond the challenges to reach your goals
As community banks move forward with optimism, they continue to deal with the realities of today’s business environment. Competition from traditional and emerging service providers, potential interest rate increases, the cost of IT security, lingering compliance concerns and, of course, the often unpredictability of consumer behavior are challenges that all institutions share on some level.
Despite these obstacles, healthy growth is possible. By creating exceptional customer experiences, providing fully disclosed programs, offering convenient services, your institution can strengthen existing relationships and attract new business—all of which will potentially lead to more revenue opportunities.
Don’t let potential earnings slip out the door
In today’s competitive environment, chances are pretty good that you are sharing your customers with a competitor. According to a recent survey (click here to read the article), 50% of Americans have a checking account at multiple financial institutions. The top reasons why include flexibility and convenience, followed by the variety of products and services offered and lower fees. If you’re not providing your account holders with a one-stop banking experience, it’s time to take a look at your service strategy to see why not.
Volume is key to increasing revenue
Consumers are willing to pay a fee for a service that they value. The more they use the service, the more fees your bank will receive. But, if your customers don’t know you offer a certain service, and subsequently get that service someplace else, you’re losing potential revenue and missing a cost-effective opportunity to achieve across-the-board growth. What’s more, your competition is reaping the rewards.
Unfortunately, many community banks may not know that they’re losing revenue because they are more focused on attracting new checking accounts than analyzing their existing customer activity. Is this the situation in your institution?
Take a minute to answer the following questions:
- Are your current customers aware of all the services you provide?
- Do they know how your services work?
- Do you have the analytics that allow you to track how your services are used?
Overcome growth obstacles with a proven solution
For example, are all eligible account holders using your overdraft services? A results-oriented overdraft program is a reliable source of revenue for your bank that can support the implementation of additional services to keep you competitive, update your technology and offset the costs of addressing compliance expectations. Plus, a fully disclosed program provides customers with access to a safety net in the event they experience a financial emergency and helps them to manage their finances more effectively.
As a trusted provider of revenue enhancement solutions, JMFA has implemented more than 2,000 customized program installations for financial institutions throughout the U.S. As a result, in addition to experiencing non-interest income increases from 50 to 300%—in many cases far exceeding their expectations—our clients maintain total compliance with all regulatory expectations.
Cultivating what you have leads to long-term growth
Remember, it costs less to keep your existing customers than to acquire new ones. And adding new accounts may not result in growth, if account holders don’t use the services you provide.
Whatever your growth strategy might be for 2018, make sure that you are optimizing the business potential of your existing account holders by effectively communicating your products and services. The more you enhance the customer experience, the more they benefit. And when people are satisfied with their experience, they are much more likely to share it with friends and family—which can result in an inexpensive and effective way to grow.