ONE is the Loneliest Number?

Posted on Wed, Apr 15, 2015 @ 08:00 AM

JasonSchwabline_50x50 Author: Jason Schwabline,

One. Numero Uno. The “loneliest number”, or the goal?  Customer experience in the financial services space has been measured under one interaction point for years—the branch. A bank lived and died through the relationships it cultivated and nurtured through its branches. Sometimes a visit was joyful … a first account or a new home for instance. Other times it was more like “Houston, we have a problem” and the branch became the rescue craft. While the reasons for interacting with a bank remain the same, the method of interaction between customers and their financial institution has evolved. Choice is king. A customer can now interact with their bank through many channels—picking the one that suits their comfort level and needs of the moment: a teller in a local branch, a quick dash to an image-enabled ATM, through their smartphone while at soccer, or late at night watching TV when they remember to complete a needed transfer before morning. 

Choice and convenience are key, but with them comes a cost. Not a perceived cost as once thought, but true hard dollars. Each new interaction point carries with it a new “channel.” New “channels” require new infrastructure. New infrastructure requires new maintenance and auditing processes, not to mention new fraud and risk considerations. The customer sees a shiny new mobile app letting them take “check selfies” that makes their money instantly real and available. Or a new kiosk in the lobby that lets them start most of a transaction by themselves and just pick up the cash on the way out. Cool huh? What a financial services provider sees are new costs and infrastructure requirements and they wonder how this will impact their total cost of transaction (up or down!), as well as whether a change will cause the customer to stay with the bank for the long term. This is where the concept of “ONE” comes into play.

What I see is that we are nowOne_Customer_Experience at a point of maturation in the deposit space. We know that acquiring that transaction is key. Being the first to get that deposit captured gets the leg up on the competition as you are then first to get those monies into the financial system and working. As the customer and their interactions have now matured, so too should the infrastructure that supports it. A customer wants “ONE” way to interact with you as a bank. This doesn’t mean one channel - it means one experience with a similar look and expected result regardless of the channel. 

For your bank this extends into an even more important choice for the future. Centralizing transaction acquisition technologies is no longer a choice but a necessity. One common processing platform can and should be put into place that would centralize all rules for deposits and their associated images, allowing for a more efficient operation that drives ONE experience for your customer. This doesn’t stop at how you acquire deposits, but follows the transaction all the way through to the back office where many institutions over the years have built 15, 25, even more than 30 systems in one known case to care for transaction processing. The technology exists today to migrate all bank silos into a more unified, common processing platform and it has been proven to be effective. It’s not a dream, it’s real and it’s here and nothing will have a greater impact on the total cost of a transaction and a unified customer experience. It’s time to break down the silos internally as well as externally. I started off the blog with a nod to a classic song and I close with another—time to “tear down the walls”.  It’s time for silos to go as we move to “ONE.”

  Learn More About Seamless Image Capture  Across the Branch Environment

Tags: customer experience, electronic channel strategy

4 Ways to Connect with your Customers through Email Marketing

Posted on Wed, Apr 08, 2015 @ 08:00 AM

Lauren_Gleim_Headshot_50x50 Author: Lauren Gleim, 

“Hi there, I’m Lauren. Nice to meet you!”  It takes just a quick glance to evaluate someone when you first Email_Marketingmeet them. First impressions establish the relationship and are hard to reverse. No pressure, right? When you first meet someone whether in a social setting or at work, you engage with that person. A friendly smile and a handshake can go a long way. Just like you and me, your customers are people and our interactions with them can dictate the direction of that relationship. Customer engagement can set you apart from the competition and is driven by your ability to personalize that customer experience. Even if you can’t interact with your customers face-to-face, you can still create a personalized interaction through email marketing. Email remains the ultimate form of communication with your customer (techradar). Start your customers’ experience off right with these 4 recommendations:

Base emails on Customer Behavior

Don’t be late when you meet with customers even when it comes to emails. The opportunity to interact with your customers on time is there. Send emails based upon their site behavior in your product. Use email as your digital handshake and establish a connection in the beginning. Say hello with a welcome email when they enroll in online banking or bill pay. If John Doe hasn’t logged into this account in a month, tell him you miss him with an email reminding him about your features/services. Use these customer behaviors to create your email customer journey.    

Personalize Your Email Interactions

The average customer sends or receives 121 emails per day (The Radicati Group). Make your emails count! You are competing with emails from family members, social media notifications and other promotional materials.  Present your brand by adding your institution’s name and logo to your emails. Go a little further and add personalized customer content including your customers’ first name and the last 4 digits of their account. Opening emails with personalized information establishes trust and builds authenticity with your brand.  

Educate Your Customers 

Emails are not only about generating sales, you can use them for educational purposes. As you send a welcome email to your new customers, highlight features of your online banking and bill pay platforms. Educate them with demos, landing pages and tips. Consider this the “getting to know you” stage of your customer journey. Let them understand what your institution has to offer. 

Add Social Media Buttons 

Are you connected through social media? Include these links in your emails to customers. When you meet a new friend the next natural step is to friend them on Facebook or follow them on Twitter. Your customers are the same. They want to stay connected through any avenue you offer whether email, your website or social media. Keep them posted.

Small additions to emails make a large impact on customer engagement with your institution. In last month’s blog by Barbara Vega, she underscores the importance of attracting and retaining customers through strategic marketing.  Be strategic with your email marketing initiatives and use your digital marketing tools to your advantage. Form a positive customer-centric first impression.The iPay Resource Center has marketing materials to help you with your email marketing customer journey. Don’t miss out on FREE marketing!

iPay Resource Center


Tags: social media, bill pay, customer engagement, email marketing,

Business is About People (and Their Data)

Posted on Wed, Apr 01, 2015 @ 08:00 AM

Eric Flick Author: Eric Flick,

While it may sound cliché, our customers and employees are people.  Without them, our business doesn’t exist.  And, in this always on world, we live in, its mind boggling the amount of data that any one individual can generate.  Do an internet search of your name, your phone number, and your home address.  You may be astounded at what comes up.  There is data about you everywhere.  If you work for a financial institution (FI), your customers and members expect the data that you have related to them to be safe, secure, and available.  Surprisingly, of those three, secure may be the most straightforward, but that’s a different conversation.  We work with dozens of prospects and customers each and every week as they look at the gigabytes and terabytes of data they have across a myriad of platforms.  Beyond secure, how do they keep that data safe and available should they experience a business disruption to their data center? 

While that may sound intimidating, here are three questions you can ask to help guide your decisions about taking care of all of that data: 

  1. How often does the data change?
  2. How often is the data backed up and moved off-site?
  3. How much data loss is acceptable? 

Let’s think about some various applications – core processing, item processing, ATM, ACH, and internet banking transactions.  Let’s also bring email into the conversation. Using email as an example, your response to question number one was probably that data related to email changes consistently throughout the day and if you’re like a lot of customers we talk to, you answered that you back up weekly to question number two. Where this gets tricky though, is that most customers’ answers to the third question is “none”, I can’t lose any data. 

While “no data loss” is aSecurityverything was backed up on something called a diskette.  As ancient as that may sound to many of you, there are just as many people today that would consider backing up to tape equally ancient.

Today, modern FI’s are using a software solution over a secure connection to transfer data as it changes to a secure, offsite partner, that stands by ready to bring that data back to life should something happen at the FI.

You certainly hope that your FI is taking care of your data, keeping it secure, safe, and available.  Business is about people, and their data, and the FI taking care of it.

Learn More:   Keeping Data Secure, Safe & Available

Tags: customer data, data backup

Lockbox Services At-A-Glance

Posted on Wed, Mar 25, 2015 @ 08:22 AM

rob_hudecek_small Author: Rob Hudecek,

Traditionally many financial institutions offered lockbox services because they had to, not because they wanted to; and usually only to secure a high profile loan or depositor.  This approach rarely works (whether it be for lockbox or any other venture).  It is not by accident that many of the articles published on this blog focus on customer service as the strength of a community institution, and is often directly related to the community it helps create.  

From treasury management to loan officers, it is important to verse yourself in the growing needs of businesses who are considering outsourcing their payments (and generate fee income for your institution in the process):

  • For some merchants it’s the benefit to move their work to the cloud (i.e. anywhere but in their office).
  • For others it is to save on employee salaries.
  • And yet for others it is the last piece that is necessary in order to move to remote offices.

Types of Work

Retail: With support for MICR, Barcode, machine print, handwriting, and checkbox recognition, retail work covers straight-forward utility payments to complex order forms and surveys.  Basically any document with static or semi-static information can be processed.  The lockbox automates and validates electronic and paper payment posting to a merchant’s accounts receivable system to eliminate manual processes, improve research, and reduce costs.  

Service Offering:

  • Check, coupon, envelope, and correspondence scanning
  • Electronic remittance interfaces for bill pay and payment portals
  • Validation and reject file import
  • Electronic deposit
  • Account receivable posting
  • Remote scanning for walk-in payments
  • Remote client exception processing
  • Short and long term storage and web research options 

Target Audience processing over 2,000 transactions a month (with a sweet spot of 4,000 transactions or more): 

  • Government and Schools
  • Utilities
  • Property Management
  • Non-Profit and Churches
  • Retail Stores

Healthcare: Provides streamlined electronic and paper claim conversion, reconciliation, payment posting, and research to the healthcare provider.  Despite government initiatives, a large portion of healthcare remittance is still paper-based.  Even for electronic files, the modern standard for claim reconciliation is utilizing spreadsheet pivot tables.  By signing up with a lockbox, provider administrative offices have more time to concentrate on denial management and finding “under the couch” money for their practices.

Service Offering:

  • Conversion of paper EOB and ERA to one standard format
  • Automated data lift of paper EOB remittance to 835 posting file
  • Re-association of EFT/ACH payments to EOB and ERA remits
  • Quickly research claim and transaction level denials, remark codes, and correspondence
  • Aggregator or provider level dashboard reporting of the revenue cycle
  • Remote scanning for walk-in payments
  • Short and long term storage and web research options

Target Audience processing over 1,000 claims a month (with a sweet spot of 5,000 claims or more):

  • Regional Hospitals
  • Clinics and Multi-Practice Offices
  • Billing Companies
  • Direct Medical Providers

Lockbox services do not have to be delivered as a “you get what you get and don’t throw a fit” offering.  By employing modern technologies and good old “know your customer” practices, lockbox can be a very successful program for both your institution and the business communities it serves.

ProfitStars Lockbox Services Learn More Today

Tags: payments processing, lockbox services

How to Fight a Decreasing NIM in Your Financial Institution

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

Brad Dahlman Author: Brad Dahlman,

The economic down turn of 2009 – 2012 is behind us.  We have started to see economic growth and increased loan demand, and charge-offs have returned to normal levels.  These are all positive trends for banks and credit unions.  The next big challenge bankers face is fighting the trend against margin compression.  For the banking industry over the past five years we have seen overall NIM decline by 19bp (3.02% - 2.83% - see Chart 1).

The low margin is partly affected by a very low return on the investment portion of the balance sheet.  However, we have also seen decrease spread  on loan and deposit rates over the past five years, with a dramatic compression from 2010 to 2012 (Chart 2).  In 2010 the spread between loan and deposit rates was 4.85% (5.54% - .83%) and in 2013 it had dropped to 4.44% (4.92% - .48%).  This 39bp drop in spread is very concerning since margin is the “lion share” of banking revenues.  In 2013, margin accounts for 62% of overall revenues with fees accounting for the other 38%.

Net Interest Margin Chart 1

Chart 1

Margin Compression Chart 2

Chart 2

The best way to combat this compression trend is understanding and using relationship profitability data.  Relationship profitability allows bankers to understand which clients contribute most significantly to the organization’s profit.  We find that up to 180% of the organization’s profitability is concentrated in the hands of the top 20% of clients.  The first step is to build a process to systematically determine and distribute profitability data to the front-line so they can effectively interact with clients and fight the compression trend.

Key uses for Profitability Data

  1. Effectively Pricing New Transactions – Existing business already has a locked in margin, but using profitability data in pricing “the next transaction” can be very powerful in improving profit margins.  First, we must understand the client’s existing profitability, then determine the profit associated with adding a new loan/deposit or service.  It is important to understand the account level profitability and also give your bankers the ability to modify pricing parameters (rates, balances, fees, and terms) to see the impact of these changes on pricing.
  2. Client Relationship Management – With well over 100% of your organization’s profit concentrated in the top 10% of your clients it is essential to know who these “key clients” are!   Empowered with this data, banks are using the information in officer assignments, outbound calling campaigns, and fee waiver decisions with the ultimate goal of reducing your “key client attrition” rate.
  3. Feeding Profitability Data into Marketing Systems – Profitability is an important factor many bankers use in marketing additional products and services to their clients.  As a factor in marketing campaigns, we find that special campaigns or offers may be built for your most valuable clients.
  4. Evaluating and Rewarding Officers for Profit Improvements – Do you reward officers based the size of their portfolio?  If so, you aren’t alone, but what do you really want from a commercial banking officer?  Most banks say they want improved profit from their portfolio.  Account profitability data aggregated by loan officer can provide you insights into the value of each officer’s portfolio.  Then over time you can start rewarding officers for profit improvement, which more closely aligns to most banks goals.

Our bank and credit union clients that actively analyze and use customer profitability information generally drive NIM that is 10 basis points or more above their competition.

Visit Our Profitability  Knowledge Center to Learn More



Tags: profitability analytics, Net interest margin

Candidate for the Endangered Species List – The Loyal Business Customer

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

Barbara Vega Author: Barbara Vega,

I am awaiting The World Wildlife Fund to be on red alert for the recovery of the Loyal Business Customer. The population of the Loyal Business Customer that once banked with the local institution because of personal relationships and formed trust is diminishing in population at an accelerated rate. According to this Aite report, among businesses with more than $1 million in annual revenue, about 1/3 are using non-financial institution providers.  More than a third of small businesses state they would change institutions for the right package of services. This attributes to lost potential revenue for financial institutions (FIs).  About 2/3 of businesses generating less than $20 million in annual revenue see FI services as a commodity with little differentiation.

If FIs don’t want the Loyal Business Customer to disappear forever, they need to develop a strategy to attract and retain them. 

How can FIs foster loyalty? 

FIs must find ways to differentiate their business products. As digital banking grows, technology-based services are becoming more and more important to savvy commercial users. FIs need to offer products based on technologies that customers and members value.  

At a minimum, FIs must at least keep up with the latest features and technologies. In this omni-channel world, customers expect to be able to use the channel of their choice when and where it suits them. When it comes to online services, you are competing against more than just your local market. Your market is bigger than you think!  

FIs also can differentiate their business products through innovative pricing or by bundling several products together in appealing ways.

Additionally, FIs must remember that prospective and existing customers or members cannot want your products and services if they don’t know they exist. You can have the best service and products in your market place, but if the competition is better at communicating what they have, and the value of what they have, they win the customer. The FI that tells them about the latest and greatest product, service, fees, or rates will typically win their business.

With digital channels making it easier to purchase products, there is huge opportunity to cross-sell business services and build customer loyalty, but it has also become easier for commercial customers and members to buy some financial services from a bank or credit union other than their primary FI. Competitive forces will increase over time, giving customers even more opportunity to shop around for selected services. It’s crucial that your FI communicates your product options effectively, to both existing and prospective clients.

As a financial institution, you have an advantage – you can get personal!

How do you get personal communicating through impersonal technology? Electronic marketing tools are just one channel for your FI to deliver its message to your current and prospective customers or members. Often these tools simply provide an introduction to a product or service that motivates a commercial prospect to seek further information.  If your FI can get people to call or visit you to find out more, you have an incredible opportunity to begin a new relationship or engender loyalty for an existing client.

Your commercial customers or members can’t develop a deeper connection with a technology platform. People establish loyalty to other people. Fortunately, as a bank or credit union, this is your strength! Talk to your business customers or members. Find out what matters to them and how you can help them achieve their goals.

No business is created equal - Know your customers! 

Surveys show that businesses are much more apt to buy products from FIs that do one simple thing: Ask questions about the business before they make their pitch. Before you start talking about how great your products are, ask a few basic questions, like: 

  • What type of business do you have?
  • What type of payments do you receive?
  • What are your payment volumes (monthly or seasonal highs and lows)?
  • What payment data do you need captured?
  • Do you require interfaces with their receivables and/or payables platforms?
  • Are there any special features you need from a business product?

Once you have an understanding of your customer’s needs, you can more effectively communicate your offerings. A more effective sales pitch results in your business customers opting for more products and services, and the more products and services you place with your customers or members, the deeper the relationship will be. Online banking services can be a great source of synergy for your subscribers, but someone must first take the time to understand the business in order to suggest solutions that will truly make the businesses (and the lives of those who manage it) better.

Indodobird today’s fast-paced, digital world of instant communication, there are no second chances to make a first impression. It’s more important now than ever before to make your products stand out in ways that show your FI in a positive light. When it comes to selling business services, financial institutions should be consistently engaging customers across all service channels. Financial institutions should develop a sense of urgency and take immediate measures to save the last remnants of the Loyal Business Customer, before they go the way of the dodo.


Tags: online banking, strategic marketing, small business market, business online bill pay

Calculating Customer Relationship Management ROI

Posted on Wed, Mar 04, 2015 @ 08:45 AM

Author: Barbara Kempf,

The return on a financial institution’s investment in Customer Relationship Management (CRM) is more than covering the cost of the physical tools that support good CRM and sales.  The real issue is calculating the ROI on the total cost of the changes made to shift the front-line focus, placing it more sharply on the client.

The organization’s initial CRM costs typically include:  sales and service training, client service process improvements, possible organizational and staffing changes, and purchase of a comprehensive CRM system to facilitate front-line client interactions, client contact management, sales results tracking and reporting, and client profitability calculation and reporting.

Reduce Expenses

The financial services industry has been criticized in the past for trying to “save itself into profitability”, when the smoother and quicker road to profitability lies in increased revenue.  CRM is far more a revenue-generator than an expense reducer. 

However, developing the organization’s CRM processes may reveal redundancies in procedures working to the client’s detriment.  When these are replaced with smoother, more direct workflow procedures savings will result.  Once new processes are in place, employees should be able to describe time savings that result because they are now able to work with clients without having to scour the bank to build a comprehensive picture of the overall relationship.  Time studies document improved employee efficiency and productivity.

Generate Additional Revenue

CRM’s real strength is in generating additional revenue.  As individuals and the entire organization get to know each client better, and as the client recognizes the organization’s commitment to superior service, relationships will grow to include more products, an open discussion of financial needs providing the opportunity to offer additional services, and increased client satisfaction and loyalty leading to longer lifetime value.  Improved client satisfaction can also be expected to result in increased recommendation and referral of new clients.

Following improved numbers and the resulting ROI demands a before-and-after approach.  The organization must start from knowing what was happening before changes were initiated to improve client sales and service through the CRM process.

Track the before and after volume of:

Sales Results

  • New clients
  • New accounts
  • Deeper client relationships (products per household)
  • Client profitability
  • Referrals received from clients
  • Other client loyalty measures
  • Market share

Sales Activities

  • Referrals
  • Sales calls and calls in pipeline
  • Client interviewing (profiles)
  • Client contact activity (follow-up on cues, leads)
  • New prospects (identified and solicited)

The “before” numbers present a problem for many organizations.  “If we had a good tracking system we wouldn’t be making these changes.”  When before numbers are not reliable or not available, use the first three months of the CRM process to develop baseline numbers on all variables.  Then, collect the same information monthly thereafter to build a picture of the changes occurring and their value to the organization. 

Know the value of a sale and of an individual sales activity.  Use client profitability to track most profitable clients, sales associates, and products.  Help sales associates know how to work with their clients to improve client service and client profitability.  Use client and product profitability numbers to make better, speedier decisions at the front-line. 

Collect Anecdotal Evidence

Even the most concrete business has a myriad of subjective factors contributing to the ROI of any organizational change.  As with sales measures, to the extent possible identify baseline and on-going measures for:

  • Client satisfaction
  • Client loyalty
  • Marketplace perception of the organization 

Encourage front-line staff to report client comments about the changes occurring.  If clients aren’t noticing a change, the organization is not yet doing enough! 

Review the Numbers

Review the numbers rigorously.  Use them to:

  • Assess the need for further CRM process changes,
  • Plan tune-up training on the CRM system or on sales and service skills, and
  • Communicate with front-line staff the organization-wide effect of the changes they are making in day-to-day client interactions.


Tags: customer profitability, customer relationship management

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

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