One unfair side effect of the greed and unethical behavior coming out of the mega- and Wall Street banks, is the tarnishing of the image of the “banker” by the mainstream media. Certainly it was not the community banker who contributed to the global financial crisis or manipulated LIBOR rates. While Dimon, Stumpf, Blankfien, Lewis and their ilk were riding high and wreaking havoc on the economy, down at the bottom of the hill, where the dung of these four horseman of the apocalypse’s behavior rolled down, stood the community banker doing their best to keep his bank alive and her town in business.
Surviving that nightmare only to be placed under a constant barrage of new regulatory and compliance mandates, the community banker now spends more and more resources proving they are behaving nicely. The proof of compliance is and always has been there. The problem, and why today’s cost of compliance is so high, is the disconnect between the proving information and the regulatory reporting. Unless compliance and compliance-related reporting are designed and baked into the process from the beginning, there will always be manual rekeying, redundant verifications, and checkers-checking-the-checkers.
The solution to lowering compliance costs lies in leaders with a process and data oriented vision.
To exist as a bank, it is a given that you must have lenders who can maintain relationships over the long-term and who are financially savvy enough to bring deals to the table that enhance both the borrower’s and the bank’s situation. But the skill sets of a relationship manager do not translate into efficient process design or data integration capabilities. That’s why many process improvement initiatives led by lenders result in a short form application, a medium form, and a long form for the really big and complex deals. While these 3 forms do promote the early-triage, multi-path, best practices approach to efficient process design, it’s not the form that is the root cause. It’s the data. Too little or too much, and never reused.
At its heart a bank is system of processes. See my post on the Dirty Dozen processes that you have to get right. When these processes are reengineered with the needs of all of the stakeholders in mind, the new process will be cheaper to operate. Finance and ALCO can be assured loans are being priced correctly. Credit can be assured that loan policy is being followed. Compliance can rest easy knowing the regulatory requirements are satisfied. Loan Servicing will know the loan record on core matches the loan information on the documents and the documents match what Credit approved.
“The difference between winning companies and losers is that winning companies know how to do their work better.”
– Michael Hammer
Until banks and credit unions assign leaders to processes the internal processes will continue to be a Frankenstein-inspired spaghetti of activities held together by duct tape and a lengthy roster of data re-entry clerks. To change this the next generation of leaders will have a blend of business, IT, operations, project, strategy, and relationship building skills.
At their most fundamental, these next generation process leaders will:
- Be responsible for the design, maintenance, and enhancement of a process
- Coach process performers through special cases and exceptions
- Advocate for financial investment into the process
Even before the image of a banker was besmirched by the too-big-too-fail execs it was no short order to find just one of these process leaders, much less the few that you need.
If you want to be a winner, keep your eyes open for them.
About Agile Banking
Agile Banking provides consulting, solutions, and skilled digital laborers that address the full lifecycle of information management.
Bank-In-A-Box is our preconfigured for OnBase imaging and workflow system that is easy to use and integrates with any core system.
Loan Vault Decimation is our turnkey solution to quickly and accurately scan and index entire paper filing systems.
Record Schedule for Banking is our nationally compliant record retention schedule that manages electronic records in any ECM to final disposition.
ExactImport automatically transfers documents between OnBase and ExactBid's RIMS appraisal management system.
We are passionate about process and data, and experienced as bankers.
We are where information management works!