A lot of banks take time during October for strategic planning. If I were a banker, these are some of the things I would put on my strategic planning meeting agenda.
Should we start a virtual bank? A long-established bank might not have much opportunity to grow its business footprint, so rather than defining the market by geography, maybe we define it by affinity and reach out to new customers digitally. The return on investment in a new branch might pale compared to the online customers who may respond to a separately-branded digital bank designed to serve the owners of franchise businesses, real estate agents, entrepreneurs, dentists or another super niche.
How do we make the most of our new PPP customers? As these loans are forgiven, how can the bank continue to offer these customers meaningful services? Are there financial services, such as treasury management, payroll services, tax preparation or benefits management that we can offer through our holding company?
How can we grow our digital engagement? Whatever the bank’s current digital footprint, it’s not enough. Let’s face it, the entire payments system is essentially digital at this point. If we don’t have a way to insert ourselves into the virtual economy, we are on the sidelines. Nobody writes checks anymore, and few people carry around cash the way they used to. And coins? Forget about it! Everyone’s got an account with Venmo or equivalent.
What do we have to do to attract the best talent? Take everything you think you know about HR and throw it out the window. Stop keeping track of sick days, dump the dress codes, pay more for talent and don’t be afraid to ask under-performers to improve or leave. Recruit everywhere because people in lots of jobs can work from anywhere at any time.
What’s our capital plan and should we buy our growth? Sub debt is economically purchased right now; investors are looking for places to put their capital. Lacking scale, some of the smallest banks are finding it difficult to keep up. It might be a good time to make an offer on that little bank in the neighboring county.
Each of these items merits a half-day’s discussion by bank leadership. You probably feel a sense of urgency about some of these issues now, so don’t delay. Your conclusions could make your roadmap for the next few years.