Young Lenders and the Groundhog Syndrome

Posted on Wed, Feb 25, 2015 @ 08:00 AM

clarke_farmer Author: Clarke Farmer,

CEOs and Chief Lending Officers, have you ever met a young lender that seemed to see his/her shadow while out on a business development call?  Then, just like the groundhog, that lender will retreat back to the burrow with nothing more than a prospect’s business card.

If so, then you are not alone.  In the last 60 days, I had several conversations with bank executives in Minneapolis, Oklahoma City, Fresno and Atlanta on that very topic.  We discussed the challenge of transitioning some of the bank’s credit analysts into commercial lending roles.  As in most community banks, there simply isn’t much training and development infrastructure to accomplish this effectively.

We talked about transitioning from a focus on asset quality to the two-pronged challenge of growing loans while maintaining the asset quality “habits” honed in tough times.   After so much intellectual focus on problem resolution, who would blame a young lender that fears the outside world?

Another challenge is driven by the most experienced lenders’ volume of portfolio responsibilities.  These folks are so busy maintaining massive portfolios that they don’t have time to prospect and work on more profitable opportunities.  The irony here is that they are the very lenders that have the “chops” to go get new business sooner than their less experienced peers. 

There is no easy solution to report.  Rather, I’ll share where the discussions are headed based upon a ton of industry experience and (perhaps more critical) the recognition that old banking habits need to change. 


Less experienced lenders have spent most of their career analyzing credit or fulfilling requests from customers.  They need to learn how to deliver valuable guidance to customers.   Networking at Rotary and Chamber meetings alone won’t suffice.  Teach them how to plan prospect calls.   Teach them how to match your competencies with the customers’ strategic initiatives.  Then, they need to communicate with the client in a manner that will influence outcomes.


Hold these less experienced lenders accountable for prospecting activity, substance and follow-up.   You can’t make new loans sitting behind the desk. Talk about their prospecting calls to evaluate and coach on substance and effectiveness.  Ask what they discovered about the prospect’s business initiatives and how the bank can influence their success.  Guide them on follow-up strategies.   Monetize the value of making a decision in a timely manner.  Establish mutually agreed upon timelines.  Hold the lender and prospect accountable to the timeline. 

Deploy technology to manage all aspects of accountability:  calling activity, engagement notes and effective follow through.   There are many applications available to bankers today.  Consider ProfitStars’ new Commercial Lending Center as a simple tool for this purpose.


Unless your bank is the only bank in town, its time to embrace incentive plans.  The alternative is to continue living in a commoditized market. There, your only differentiating factor is the “skinny” deal your young lender just cut that will impair the profitability of your loan portfolio.  Use incentive plans to attract and retain the talent required to execute on all of the above. 

What are you doing about your groundhog problem? 

For our clients: remember that your ProfitStars Commercial Lending Solutions team can assist you with sales/monitoring expertise as well as training/accountability.

Commercial Lending Center

Tags: lenders, loan growth, commercial lending

The Four C’s - Cybersecurity, C-Suite, Clarity, and Collaboration

Posted on Wed, Feb 18, 2015 @ 08:00 AM

kcrumbley_50x50 Author: Karen Crumbley, 

During the final quarter of 2014, the “FFIEC Cybersecurity Assessment General Observations” and the “Cybersecurity Threat and Vulnerability Monitoring and Sharing Statement” documents were released. This documentation included findings from the Cybersecurity Examination Work Program – a survey that came from more than 500 community financial institutions (FIs) where they were evaluated by the FFIEC for preparedness to mitigate cybersecurity risks. As a result, other FIs are able to benefit from valuable insight in terms of forthcoming expectations regarding cybersecurity guidance.

Specifically noted in the FFIEC’s observation release was the considerable focus on the community FI’s C-Suite involvement of cybersecurity risks. The C-Suite members of the FI will need to play a larger role in cybersecurity efforts and actively engage on the topic. When it comes to cybersecurity, a FI’s C-Suite faces unique challenges because its responsibilities differ from those of other corporations. Compliance directives such as the Gramm-Leach-Bliley Act and section 216 of the Fair and Accurate Credit Transaction Act have required strict safeguards for information security and identity theft compliance. The FI’s C-Suite is accountable not only to shareholders and to depositors, but also to regulators. Managing risks to serve these interests is a critical challenge and the C-Suite requires cybersecurity education to keep them up-to-date on the latest information specific to their needs. If your FI presents the same information security PowerPoint presentation each year to the C-Suite audience, it may be time to update content and provide new channels to communicate the material in order to address cybersecurity. Consider the option of conducting online training, as it may be more convenient and time-efficient, leaving the on-site board meetings open for other items on the agenda.

The FFIEC outlined specific questions in the observations documentation concerning the FI’s existing cybersecurity state. The suggested questions set forth clear objectives for each FI to consider. The following questions are examples from the documentation on points for the C-Suite audience to consider in order to bring clarity to the topic of cybersecurity.

  • How does the FI evaluate evolving cyber threats and vulnerabilities in their risk assessment process for the technologies they use and the products and services they offer?
  • How do the FI’s connections, products and services offered, and technologies used collectively affect the FI’s overall inherent cybersecurity risk?
  • What is the process for ensuring ongoing and routine discussions by the C-Suite about cyber threats and vulnerabilities to the FI?
  • How is accountability determined for managing cyber risks across the FI? Does this include management’s accountability for business decisions that may introduce new cyber risks?
  • What is the process for determining and implementing preventive, detective, and corrective controls on the FI’s network?


Much of the movement towards cybersecurity awareness includes a collaborative component that encourages the sharing of information with law enforcement agencies or organizations such as Financial Services Information Sharing Analysis Center (also known as FS-ISAC). Additionally, FIs will need to take a comprehensive approach to cybersecurity awareness education and greatly emphasize the importance of involving all stakeholders including the C-Suite, staff, account holders, and third-party service providers.

Today’s FIs are susceptible to rapidly evolving cyber threats and there are gaps that exist in the FI’s efforts to combat them. As a result, the FFIEC will be releasing updated cybersecurity guidance to take effect soon. Therefore, the need is great for C-Suite involvement, including understanding the FI’s cybersecurity inherent risk as well as collaborating and routinely discussing cybersecurity issues in meetings. Is your FI considering the four C’s in order to prepare for pending guidance?

Please contact Gladiator’s IT Regulatory Compliance Department for questions regarding forthcoming guidance at


Tags: cybersecurity, IT Regulatory Compliance

Let Me Tell You Why I’m Leaving

Posted on Wed, Feb 11, 2015 @ 08:00 AM

moland1_50x50 Author: Kevin Moland,

I did something today I never thought I’d do: I left my bank.

What’s even more surprising is that I stopped by that top five national bank just down the street and moved my accounts there. Part of what makes this story so strange is that after a dozen years working in a community financial institution (FI) and two decades working for software vendors that service community financial institutions, I know local banks and credit unions (CUs) are the good guys and big banks are the evil empire. Nevertheless, I’m going over to the dark side.

How could this happen? My relationship with my local FI goes back to the early 1990s. I love them. I love their people. I have no desire to leave. Unfortunately, I feel like they aren’t giving me much of a choice.

Like most people I know, technology—in the form of my smartphone—has revolutionized my daily life. My “phone” has evolved to be so much more: it’s my calendar, my calculator, my alarm clock, my map, my library, my radio, and my portable TV. I use it to listen to music; read books; get news, sports and weather; check the time; navigate to new destinations; and, most importantly, make payments and track my finances. For years I’ve struggled to make my string of increasingly sophisticated devices integrate with my local FI’s increasingly outdated systems. I’ve forced myself to navigate through online banking products that aren’t designed to work with smartphone-sized screens. I’ve manually entered transactions into apps I had to buy because my local FI’s system doesn’t automatically integrate with any of the cool new financial management tools available in the App Store. I’ve made repeated trips to branches to deposit checks because my local FI doesn’t let me deposit them via my smartphone. To top it all off, a few weeks ago I upgraded to Apple’s new iPhone 6, but my local FI doesn’t support Apple Pay. I would love to think better mobile banking services are coming soon, but when I ask branch staff about it, all I get is an embarrassed apology.

Demographically, you’d think I would be right in a local bank’s or credit union’s sweet spot. I’m a successful mid-fifties professional. I work in a local office building near a mall. I have a mortgage, a car payment, three checking accounts, and two savings accounts. So when I realized I was unhappy with my current FI, the first thing I did was look around at other local banks and credit unions. I was surprised to learn that none of them offer services that include mobile banking, mobile remote deposit, integration with mobile financial management tools, and Apple Pay.

Losing my business won’t make a material dent in my local FI’s bottom line, but several of my friends are also customers, and they are feeling the same pain. Some of them have already left. Others are thinking about leaving. Based on recent headlines, we’re not alone. The problem is even more pronounced when it comes to younger people who are just entering the banking marketA recent report indicated that 70% of 30-and-under shoppers looking for a new bank consider mobile services a “must have.” More than half of those over 30 feel the same way. Unfortunately, if local banks and credit unions don’t pick up the pace at which they are deploying better mobile services, it won’t be long before the number of people going over to the dark side begins to make a big difference.

The good news is that technological advances have made it easy and relatively cost effective for local FIs to offer services that are competitive with bigger banks and CUs. There are killer mobile systems available for community FIs that would help them break out of their technological rut without “breaking the bank.” Proactive community institutions are already moving in that direction. I’m sure my local FI will eventually get around to providing these kinds of services, but after years of being patient, I finally got tired of waiting.

So, to help them understand, I wrote my local FI a letter. I wanted to make them aware of this problem and warn them that it could get worse for them. I wanted them to know why I was leaving. To their credit, they responded with a very polite phone call that included an acknowledgement of my concerns and an apology for their lack of technological services. It was a very positive conversation, but less than a week later, I was gone. 

If you are an executive at a local community bank or credit union with minimal or non-existent services for tech-savvy users, I have important news: You have customers just like me. They love your institution. They love your people. They have no desire to leave. Unfortunately, they feel like you aren’t giving them much of a choice. Some of them may have already left. Others may be thinking about leaving—maybe even about stopping by that top five national bank just down the street. I’m telling you my story because I want to help you understand. I want to make you aware of this problem and warn you that it could get worse for you. I want you to know why your customers might be leaving.

Consider this your letter.

Tags: Mobile Banking, customer relationship management, Mobile Remote Deposit, mobile strategy

"Omni Channel” vs “Best of Breed”

Posted on Wed, Feb 04, 2015 @ 08:00 AM

danny_p Author: Danny Payne, 

The world of mobile technology and app based technology has completely changed the way all of us obsessively monitor our phones.  Let’s be honest, some of us spend as much time “playing” with our phone as we do working on it.  These app based technologies have changed travel, social media, news, and entertainment.  Financial Services and banking have also been affected by this radical change. I will not fall victim to spending my blog post talking about ApplePay, but let’s be honest … it is stealing the payments headlines and looks like it will continue to do so for a while.  Financial services, payments, and bank and credit union technologies companies are being pushed into an API based environment, where they control everything in the user experience versus the standard single sign on to the technology provider, regardless of how elegant their new “look and feel” is.  The bigger question is, how do these companies compete in this world of technology where they are asked to be behind the scenes and can’t differentiate what they do.

That leads me to the other buzz word (other than ApplePay) that is growing in the world of financial services: OmniChannel.  If you have spent any time researching your internet bank and mobile strategy you have heard one of many companies tell you about their omnichannel strategy.  For those of you looking it up on Google right now, it’s simply the blending of your internet banking, mobile banking, ATM, teller branch kiosk, and other services into one.  A cross blend of everything you interact with that makes your experience meld together.  It’s a great idea and something you will see all online banking channels move towards (if they haven’t already).  So herein lies the dilemma for technology companies everywhere.  How do they make their product better and different and interesting to you, the bank or credit union, when they are relegated to being the back-end API to the omnichannel approach?  How does the individual technology company prove a “best of breed” model, when you don’t know they are there?

Please don’t misinterpret my statements to be anti-omnichannel.  As a matter of fact, as a user, I think it is a great approach (if done correctly).  But my background has always been with start-up, privately held technology companies that wanted to be disruptive in the marketplace and break through the all in one package to show that companies should buy the best of breed.  Leaders in banks and credit unions are doing this today.  You look at all your options for core, online, mobile, bill pay, RDC, etc.  You want the best product for your users at the best price for your FI.  It makes perfect sense.  And there are many companies out there today successful because you buy in that way.  The best of breed mindset and approach is what launched the mobile banking revolution.  If not for this thought process, FI’s would all just buy whatever their core gave them for online, mobile, etc. But users are asking for more, right?  And while every core and online provider is working to provide their own best of breed model, this thought process opens the door to start-ups to be successful. 

So that’s where we find ourselves between a rock and a hard place.  Do you sacrifice the newest, brightest, and boldest new release or launch of a mobile banking, online banking, or bill pay product?  Or do you go “all in” with the ability to pull all these together for one beautiful look and feel?  There are a lot of companies betting you go “all in”.  My answer is simple, do both.  If your institution is looking for an omnichannel experience, dig beneath the look and feel of the product.  Look for the companies being leveraged to make the “magic” happen.  Make sure those are companies you would be doing business with if you were shopping best of breed.  Because your omnichannel vendor should be doing that due diligence for you to make sure they are providing a best of breed backend to your omnichannel experience.  Then, at the end of the day you get the experience you want, while doing business with the companies you want.  Seriously, how would you feel if you found out your favorite five star restaurant was serving you the frozen food out of the box at the grocery?  Even with the five star label and presentation, that wouldn’t be the experience you were buying.  The user experience for your FI shouldn’t be any different.


Tags: customer experience, payments processing, omni channel

Part 2: UI/UX Best Practices

Posted on Wed, Jan 28, 2015 @ 08:49 AM

Author: Derik Sutton,

In part one of this blog post we discussed what UI/UX is and why it’s important. In part two we will highlight some specific UI/UX influences and some best practices to consider when evaluating your digital channels.  

Let’s start with a UI/UX influence that you may have noticed more and more lately. Have you noticed how much the web and mobile web have been taken over by cards? 

Services such as Google Now, Pinterest, Facebook, and many, many others are all delivered through a card-based UI.  To learn more about card-based UI, read this article.

So why is that? 

It turns out that cards are a great way to view information across multiple device types, sizes, and orientations. 

Cards can be:

  • Stacked on top of one another in a single column.
  • Laid next to one another in two columns.
  • Stretched from their corners to be made bigger.
  • Elongated to accommodate more information.
  • Flipped over to supply even more real estate.
  • Made available to be arranged by the end user. 

The use of cards on the modern web and mobile web displaces the previous practice of single page/destination delivery to a much more flexible, customizable experience.

Cards are great at:

  • Creating small, digestible views of information.
  • Aggregating multiple data sources into a single view. 
  • Offering mini apps within an app by isolating common features/functionality.
  • Accommodating personalization by the end user.
  • Introducing new features, functionality, and services by introducing new cards to the end user.
  • Promoting information based upon user and device context.

If you hadn’t noticed the influence of cards before now, it is interesting to go through your commonly used web pages and mobile apps to evaluate their UI/UX and whether or not they use cards.

So when it comes to implementing UI/UX best practices it really starts with understanding the expectations being set by companies such as Google, Apple, Facebook, and Capital One that I highlighted in part one. So with those companies as the standard, that begs the question, “How am I ever supposed to produce an experience that meets the expectations established by Apple of Google?”

Good news, Apple and Google really want you to produce great apps for their platforms.  To guide developers through the process, both companies publish a software development kit (SDK).  Following best practices of app development and leveraging each of these SDKs leads to the best end user experience possible on each of these amazing operating systems.

The SDK has the blueprint, tools, and materials needed to build an app that maximizes the end user experience.

Well that was easy, so what’s left to decide? 

The truth is that developing native apps requires significant effort from the app developer.   Each SDK has its own development language.  So to build an iOS app and an Android app both 100% native to each device, a developer would have to build the same app, TWICE. 

Because of that conundrum, companies don’t always build native apps.  They actually have the following choices of development:

  • Native mobile apps
  • Hybrid mobile apps
  • Mobile web apps
  • Cross platform development apps

There is another long blog post that could break these down, but I suggest a quick Google search on each of those terms for articles and definitions. 

As a recommendation, I believe it is in your best interest to develop a baseline understanding of each option, the potential user experience tradeoffs, and the ability to prepare your customer base for the next wave of products, services and features based upon:

  • Camera functionality
  • Biometric capabilities
  • GPS sensor
  • NFC transmission
  • Secure data storage     

As a recent example, we have seen the ripple from Apple Pay.  Overnight Fintech went from a cloudy view of mobile wallets to receiving customer calls about mobile wallet integration timeframes. 

I hope these two posts have helped in some way enhance your understanding of UI/UX. My belief is that financial institutions are well served by gaining a summary level understanding of UI/UX and its impact on their customer base.  From there it is up to you to align yourselves with vendors that share a common goal of best representing your digital channels to your customer base. 

Tags: website design, customer experience, mobile app

UI/UX: What is it and Why you Should Care

Posted on Fri, Jan 23, 2015 @ 09:02 AM

Author: Derik Sutton,

Part 1:  What is UI/UX and why is it important?

By now you’ve heard of UI/UX.  You may have even referenced it in a conversation about a particular website, app, or other technology interface.  For most people it’s the most technical way they know how to say “I like this” or “I don’t like this.” 

UI/UX belongs to the larger descriptor, design, which further complicates this post because that term is often broadly used and hard to define. 

There will be two parts to this blog.  Today, part one will be used to summarize UI/UX as it relates to online and mobile interfaces, and to begin to understand the impact it is having on financial services.  Part two, which will post next week, will provide some specific online and mobile influences, and lay out some best practices for evaluating the UI/UX of your technology vendor. 

Part 1:  Let’s start with a summary of UI/UX.  

UI = What you see

UX = What you feel 

The role of the UI is to create an enjoyable visual interaction between a human and a computer interface.  The role of the UX is to ensure the human interaction was an enjoyable experience. 

For a deeper dive into the differences between UI and UX, I recommend visiting Just™ Creative. 

The general responsibility of a UX designer is to make sure the product flows from one step to another. UX designers use wireframes, product requirements, and user stories to frame the experience.  A good example for financial institutions is designing the process of new account sign up.

The general responsibility of a UI designer is to produce each element that visually communicates the process laid out by a UX designer.  For new account sign up, a UI designer would be responsible for the graphical layout of the process such as the icons used, typeface selection, input field size, etc.

The importance of UI/UX has risen with the advancement in computers and mobile devices. 

The general evolution looks like this:

  • Command line user interface and keyboard
  • Graphical user interface, keyboard, and mouse
  • Graphical user interface, capacitive touchscreen, and your finger

As technology has advanced, so to has the complexity of what the user sees, and what they experience.  As we start 2015 the importance of UI/UX is at an all time high.  The largest organizations in the world leverage the unique talents and abilities of UI/UX designers to delight and engage customers on a daily basis.  Quite simply these organizations exist because they are experts at driving the consumer experience and changing the world. 

This TED Talk video addresses what companies like Google and Facebook go through in their design process for products that impact billions of users. 

At this point, you may be thinking “that’s interesting, but my financial institution will never even come close to needing a product for that many users.”  

That is more than likely true, but that doesn’t matter.  Your customers are using those services and their consumer experiences are being driven by these organizations. 

Larger financial institutions are beginning to fully understand this impact.  The best example is Capital One®.  Check out these three moves all made since June 2014. 

Now you are probably thinking “well, that too is interesting, but my financial institution will never have the money to buy companies like Capital One.”

That is more than likely true, but the point is that your customers are going to compare your services to large financial institutions like Capital One.  Next week’s post will discuss UI/UX best practices, and what you can do in 2015 to give your customers the experience they expect.


Tags: website design, customer experience, mobile app

Cash Payments: Not Just for the Underbanked

Posted on Wed, Jan 14, 2015 @ 08:00 AM

Penny_Webb_Headshot_50x50 Author: Penny Webb,

If you follow payments news, you have likely seen article after article referencing the un- and under-banked describing how they function in today’s society using mostly cash, prepaid cards and smartphones. Since the mid to late 1990’s, cash payments have been thought of as the bill payment method of last resort since it can’t utilize standard forms of delivery such as mail, lockbox and internet bill payment. Cash has come to be seen as a method of payment for those whose limited banking relationships translate into limited payment choices.

While un- and under-banked individuals do account for a large portion of cash payments, others may also be drawn to the easy to use and convenient cash payment alternative. I live in Nashville, Tennessee, which has always had a thriving music industry. Celebrity chefs are also starting to swarm this town and new high-end restaurants are popping up almost weekly. These influences have infused the area with a large population of musicians and restaurant staff, both of which are more likely to deal in cash than people in 9-to-5 professions. I know Nashville is not unique in this scenario.

In addition, some financial planning programs promote the use of cash as a way to maintain privacy and monitor spending. This leaves a lot of people with ready cash and those people have bills to pay.  In fact, the total amount of U.S. currency in circulation has been increasing year over year, and a recent study by the San Francisco Fed indicated that this trend will continue. In an era where many merchants are working to eliminate cash payments due to processing costs and security risks, this would seem to leave a hole in the payments market.

As a payments provider, it is important to consider how we could meet the needs of these cash rich individuals and the merchants that need their payments. Individuals with bank accounts that end up with a stack of cash and bills to pay will need to travel to a brick and mortar bank or ATM to deposit the cash, then turn around and make a mobile payment via smart phone. The un- and  under- banked individuals  have to trek to a convenience store, bank or credit union branch to convert the cash into a money order so they can send it via US mail, or make the trip to the company or store to make the payment in person. All of these options introduce additional time and cost to the payer, and do nothing to expedite the payment process.  Wouldn’t it be much more efficient if cash-preferring payers could pay a variety of bills with cash at places they already shop? What if they could simply show the cashier a pre-printed 3D bar code or display it on their smartphone to pay their bill in the same way they pay for any other product in their shopping cart? This may sound a little far-fetched, but there are innovative products in the market today that actually make this happen. These products facilitate the payment and manage settlement between the merchant that takes in the cash and the merchant to which the payment is owed.

While cash payments aren’t going to become the norm for the majority of payers, solutions that automate and simplify paying with cash could be one way for a financial services provider to help business clients collect payments from customers. Such services could make cash a viable option for not only the un- and under-banked but also the growing number of people who consistently have ready cash or choose to rely on cash as a safe, private form of payment.


Visit Our Payments Processing Knowledge Center to Learn More

Tags: unbanked, payments processing, bill pay

2015 – The Return of Optimism

Posted on Wed, Jan 07, 2015 @ 08:00 AM

davefoss_50x50 Author: Dave Foss,

It has been a long time since industry experts have described their outlooks as “optimistic” without any type of caveat. We have been working through levels of “cautious optimism” for several years, held there by threats of a fiscal cliff, government shutdown, an unprecedented number of bank closures and other challenges. Today, almost everyone in our industry seems optimistic about the New Year, and deservedly so. 

On December 23, the U.S. reported gross domestic product growth of 5 percent in the third quarter of 2014, our strongest quarter since 2003. In response, investors sent the Dow and S&P 500 to new record highs, increasing 9 percent and 13 percent for the year, respectively. The FDIC posted U.S. bank profits of $38.7 billion in the third quarter of 2014, representing the largest year-over-year revenue increase in five years. James Chessen, chief economist for the American Bankers Association, was even quoted calling the trend of banks relying on revenue rather than cutting loan-loss reserves “terrific.” 

Penny Crosman, editor-in-chief of American Banker, reinforced this positive standpoint recently by crediting optimism about business growth as one of the lead drivers for bank tech spending in 2015. One of the biggest areas of growth for IT spending predictions will be digital banking. According to research firm Ovum, mobile banking and online banking investments are expected to grow 7.5 percent and 7 percent, respectively in 2015. A couple of groundbreaking areas for these channels include:

  • The opportunity to consistently engage customers and prospects with relevant, targeted communications; and
  • The evolution of the branch. Several of our clients are moving in-branch operations work to a tablet environment. They have removed the teller line and mobilized service representatives with touch screen devices, allowing them to conduct business from anywhere in the branch or local business offices.

There is also a strong sense of optimism around Commercial and Industrial (C&I) loan growth, an area that has been reaching record highs. Strategies that many banks are investigating to further strengthen commercial lending in 2015 include:

  • Becoming more creative with lending and alternative financing to keep strong ties with commercial customers. Lender networks and partnerships with qualified alternative lenders enable bankers to identify unique funding strategies for commercial borrowers while maintaining the rest of the relationship. It also positions banks for more traditional lines of credit down the road; and
  • Offering online commercial lending capabilities to win new customers. Borrowers gravitate toward the online experience, automated prices and automated approvals offered by alternative lenders. The speed and convenience of getting a loan can have a stronger influence on decisions than pricing or relationships.

Regardless of how bright the digital, lending and overall banking outlook, we must be ever diligent in the fight against fraud. The rising sense of alarm for security breaches will continue to grow in 2015 as we see threats to private industry sectors heighten. Jacob Jegher, a research director at Celent, reported “massive” increases in security and fraud prevention spending. In response, many of our financial institutions are opting to move their IT infrastructures to Jack Henry & Associates' secure cloud computing environment, relieving the burden of management and support. That enables IT departments to focus on new initiatives that foster growth by improving channels, customer relationships and revenue generating services.

At Jack Henry & Associates, we share in the optimistic view of growth and success for bankers in 2015. Our solutions, consultants and support can be a catalyst for your accomplishments. Thank you for trusting us to power your profitability and drive our industry to new heights. May your New Year be bright, profitable, innovative, and full of cheer.

Tags: lending opportunities, online banking, Mobile Banking, branch network

Humans Can’t Do Passwords: 3 Tips to Help FIs and Homo Sapiens

Posted on Tue, Dec 30, 2014 @ 08:00 AM

Lee_Wetherington_New_Headshot2-resized-141 Author: Lee Wetherington,

235. That’s how many passwords I have.

Correction. That’s how many different online accounts I have. I refuse to admit how many (or how few) passwords I have across my online accounts. And that brings us to today’s parting thought for 2014…

Humans can’t do passwords.

We just can’t. How many more breaches, SSL vulnerabilities, and nude celebrities do we need to see for this to sink in?

Humans can’t do passwords, at least not the right way. We’re supposed to make them strong by making them as long, unique, and unintelligible as cartoon cursing. But even if we make our passwords strong, it doesn’t matter, because we can’t remember them afterward when we do.

So we do what humans do. We use one (or just a few) passwords for scores of online accounts. Half of consumers admit to recycling the same passwords. The other half are liars: they recycle passwords too. Yes, I’m looking at you.

It gets worse. According to Javelin, the more online accounts we have, the fewer passwords we employ to protect them. People with up to 20 online accounts typically have one unique password for every two online accounts. People with more than 20 online accounts average one unique password for every three accounts.

So pervasive and worrisome is this phenomenon that the Faster Identity Online Alliance (FIDO), an organization of 150 payments and technology businesses, recently gathered to publish specifications for a Universal Authentication Framework—with the ultimate aim of wiping out passwords altogether.

In the interim, however, our problem is two-fold: not only do we have weak passwords, we only have a few of them guarding our most private assets online.  Not good.

For financial institutions, the human password problem is prickly. First, passwords stolen at other sites can often be reused to access financial sites. Second, fraudsters are now circumventing the strong password policies of some financial sites by targeting email sites instead. From there, the fraudster resets financial-site passwords and uses social media sites to glean enough privately identifiable information to pass knowledge-based authentication challenges.

If you make your password policies too tough and unrealistic, you frustrate end users and practically encourage fewer unique passwords. If you don’t enforce strong-password policies, you leave systems and data more exposed. So, what to do?

  1. Get real. Acknowledge the limitations of Homo sapiens and educate accountholders not only about strong passwords but about easy management and secure storage of those passwords too. Programs like DashLane and LastPass can not only automate the creation and storage of strong passwords but the regular changing of passwords as well. Also, be sure to promote the use of password ciphers, i.e., memorable formulas for creating unique passwords for each site respectively.
  2. Blacklist the dictionary. New breeds of password-cracking software make longer passwords less secure than they once were, especially if those passwords contain common words. Expand your password blacklist to bar the use of words found in the dictionary.
  3. Consider the future of behavioral authentication. While passwords aren’t going away any time soon, monitor the evolution of behavioral solutions. Instead of authenticating using passwords or even physical attributes (biometrics), companies like BehavioSec are verifying identities by passively observing how accountholders interact with their devices.

For more information and suggestions on balancing security and usability vis-à-vis your password policies, see Javelin Strategy and Research’s excellent report, “In Search of a Better Password Policy.”

Happy New Year!

Tags: Mobile security, cybersecurity, online banking security

Pull the String on Your Client Relationship Management Strategy

Posted on Tue, Dec 23, 2014 @ 08:00 AM

Author:  Barbara Kempf,

A wise and very successful banker in Alaska once said about the bank’s sales and service culture, “If I leave it alone for one day we stop making progress. If I ignore it for even two days we begin to slide backward.”

That’s how culture change works. It’s something that requires consistent, everyday focus. Whenever something gets in the way of the leadership team’s commitment to CRM everything stops. When the CRM strategy is eliminated from each day’s conversation, it stagnates. If senior management fails to promote, discuss, and display commitment to CRM for two consecutive days, the entire strategy begins to decline.

Focus Every Single Day
It’s not easy to consistently demonstrate the importance of excellent CRM every single day. Some days there really are other very important things to be handled. What’s a manager to do?

Enlist others in the organization to be part of your every-single-day communication strategy. Identify the ways that each member of the management team can consistently communicate the organization-wide importance of the CRM strategy.Training

CEO – The CEO is the primary service and sales leader. Without highest level definition of the CRM strategy and without consistent highest level demonstration of the value and importance of the CRM strategy, all else will fail. CRM is not a grassroots strategy. It is definitely a trickle-down strategy. When every member of the organization sees every day that the CEO believes in the CRM strategy and is walking the walk, every member of the organization will do the same.

Operations – The EVP-Operations is in an excellent position to reinforce the CEO’s CRM message or to negate it. To send a clear message to every employee, operations leaders should consistently work to review and revise client process to make "the way we do business" increasingly client-friendly. That message: I agree with the CRM strategy and am working to make every operation part of the solution for our clients, not part of the problem. When the CEO must shift focus away from CRM for a few days the EVP-Operations’ support of the CRM strategy helps to fill the leadership void for those days.

Lending – The EVP-Lending gets a bad rap in some organizations. Lenders can be the prima donnas who resist changing the way they work with the client and changing the way they document their work to share information organization-wide. Great lending managers accept their role as CRM leaders by helping to forge the CRM strategy to best serve their clients and to support how their lenders work with clients and prospects to build and grow relationships.

Outstanding lending managers clearly communicate that the bank will make loans and grow broad relationships with clients and prospects. The bank identifies ways to expand relationships, even beyond lending to include deposit, trust, investment, and insurance products. Members of the manager’s team must stay focused on CRM every single day.

Branch Administration – The EVP-Branch Administration often accepts the first-line CRM cheerleader role after the CEO. The retail associate’s role as service provider and sales person is often most clearly defined. The branch administrator’s greatest challenge may be to share CRM leadership duties with every front-line branch manager. Branch administrators must be certain that every manager in the system is clearly communicating every day that the CRM strategy is alive and well and they’ll implement it today and every day to give clients the best service possible.

Every Manager – The CFO, the IT Manager, the Marketing Manager, and the HR Manager are CRM leaders, too. Every day, without fail, they must find a way to communicate the critical value of excellent execution of the CRM strategy. Without their support and participation, management gives an inconsistent message. Without every mid- and senior-level manager’s support, the few skeptics on the front-line will see cracks in the organization’s commitment to CRM. Senior-level inconsistency will be read as uncertainty.

Pull the String
Bring your management team together today to very clearly identify the ways each team member can and will walk the talk and demonstrate commitment to the CRM strategy. Without conscious daily commitment, the front-line rightly believes “this too shall pass.” You can’t push a string. Get out front and pull every day.


Tags: strategic marketing, customer relationship management

Subscribe to Email Updates