The Daily Dividend

News, notes and insights from around the industry

SEPTEMBER 26, 2017
Now on FMStv: A Strategic ALCO
By Mark Loehrke, Editor, Financial Managers Society

a strategic alcoIn a recent Quick Poll, we asked FMS members who participates in their ALCO meetings. The next question to ask, though, is what happens once those folks all come to the table.   

That’s the focus of the latest episode of FMStv, as Mark Haberland and several of his colleagues from Darling Consulting Group discuss the difference between institutions that treat ALCO as a compliance exercise focused solely on risk and those that prefer to see those meetings as proactive, strategic decision-making sessions.   

Check out this new episode and all of the other great content on FMStv!
  
SEPTEMBER 25, 2017
Age is Only a Number
By Hilary Collins, Assistant, Publications and Research, Financial Managers Society

age is only a numberHow do people access their bank accounts? Does it make a difference if they’re a young professional that never writes checks or a retiree with who mistrusts websites and apps? Yes—but not as much as you might think.

40% use internet to check their bank account.
26% use mobile.
18% go to bank branches.
ATMs, telephone, and mail are the least popular choices, with single digit percentages.

New research from ABA shows that while customers 55 and over definitely prefer branches more than customers 54 and younger, the brick-and-mortar option is no one’s first choice. In every age group, mobile or internet banking took top honors as most used method of banking.

For customers ages 18-44, mobile is their favorite way to access their accounts, with internet in second place. For 45 and up, internet takes top honors. In the small group of 45-54, mobile was second choice, but for 55 and up, the second choice was branches.

It seems that even older generations have embraced technology and prefer the convenience of checking their bank account on the computer.
 
SEPTEMBER 22, 2017
Friday Hot Links: Millennial Edition
By Hilary Collins, Assistant, Publications and Research, Financial Managers Society

friday hot links millennial editionResearch says that Millennials in the U.S.:

Currently account for more than $1 trillion of consumer spending
Will soon make up one-third of the adult population
Will make up around 75% of the workforce by 2025

No wonder so many businesses are obsessed with understanding Millennials and finding out what makes them tick. Here’s some weekend reading to shed some light on this mysterious generation.

Millennials want instant access
New research shows that Millennials want constant access to banking services and expect immediate gratification – not surprising for a consumer segment that prefers to transfer money online and says in large measure (60%) that it can go up to a full year without writing a check. To win over Millennials, your mobile app should be fast and easy to use.

Millennials are scared to invest
New research finds that 20% of Millennials say they will never invest in the markets, and 53% will never be comfortable investing in the markets. Perhaps their local community institution could help them find the link between healthy financial habits and greater investing confidence?

Millennials love apps
Providing financial education Millennials can access online, whether through a mobile app or on a website, might be the key to winning their business. Millennials are more interested in building a financial future than some studies might suggest, but they like to do it on their own time (see above: instant gratification). Providing them with the right resources could go a long way to making them not only loyal customers, but better customers.
 

SEPTEMBER 21, 2017
The State of Chat
By Hilary Collins, Assistant, Publications and Research, Financial Managers Society

the state of chatIf AI is the wave of the future, then chatbots are at the vanguard as they become more and more prevalent in online customer service. With Siri finding phone numbers and Alexa transferring money for consumers already, how are chatbots infiltrating financial institutions

In a consumer survey from earlier this year, only 11% of respondents said they would trust a chatbot to give them mortgage advice. When making major decisions, customers still want to talk to a human.

AI still has a hard time parsing the slang and context-dependent social cues of human communication. No matter how much information it has, a chatbot can still misinterpret common turns of phrase or simply not have the answer that a customer needs. 

As a cautionary example, USAA developed a chatbot with a set of 10,000 answers that still struggled. After more study, the company found that a smaller set of more developed answers (around 3,000) was more effective, but it’s still having trouble finding the sweet spot of what customers are actually searching for.

Chatbots currently have the most potential to fill the space between a financial institution’s website and its frontline employees. If it’s hard to find an answer on a website but the problem doesn’t warrant a trip to the branch, chatbots could be the answer to simple tasks like replacing a missing card.

 

SEPTEMBER 20, 2017
Spanning the Breach
By Hilary Collins, Assistant, Research and Publications, Financial Managers Society

spanning the breachOne of the most important benefits community institutions can deliver to their customers and members is a sense of security – not only for their finances, but for their personal information as well. Privacy in the age of technology is more important than ever, and there are some important lessons to be learned from the recent Equifax breach.

Make it harder for hackers.
As the benefits of using data to help build customer relationships, make big decisions and more become ever more apparent, it is likewise becoming obvious that as we save, stockpile and sort data for our own purposes, we’re building treasure troves for hackers. As data becomes more accessible and attractive within our own organizations, it’s important to ensure we aren’t making it more accessible and attractive to hackers. 

Use more than one layer of defense.
Prevention is important, of course, but having plans in place to mitigate the damage and immediately begin recovery in the event of a breach are essential parts of a good cybersecurity program as well. One mitigation technique is separating sensitive data into smaller chunks and protecting those chunks behind different walls, so one hack is unlikely to access a large amount of information.

Make sure your response helps instead of hurting.
A ham-handed response to a major breach can do more harm than good. A strong plan should restore and improve defenses, help the customer and set the correct tone moving forward. On the other hand, a bad plan can alienate customers, hurt an institution’s public image and permanently weaken both reputation and profitability.

You’ll find more tips on cybersecurity in the cover story of the latest issue of FMS forward, our member magazine.
 

SEPTEMBER 19, 2017
Fall Reading
By Mark Loehrke, Editor, Financial Managers Society

fall readingNow that summer is over and school is back in session, it’s a perfect time to catch up with some of the great new pieces that have been added to our Perspectives section over the past couple of months.

Just within the past week, we’ve posted a brand-new article on managing mortgage pipeline risk from Robert Perry of ALM First, as well as the results of our latest FMS Quick Poll on ALCO participation.

Going back a little bit earlier in the summer, you’ll also find insightful pieces you may have missed on model validations, building your investment portfolio and modeling assumptions

So get started on your fall reading list today!
 

SEPTEMBER 18, 2017
Mark Your Calendar: CFO Roundtable
By Hilary Collins, Assistant, Publications and Research, Financial Managers Society
cfo roundtableThe days of straight number-crunching are over. Today’s CFOs are seeing their role evolving and growing more complex as they’re called upon more and more to address high-level strategic issues within their institutions. 

The CFO Roundtable is an exclusive event designed to bring together CFOs from community banks, credit unions and thrifts to discuss the growing challenges of their ever-changing position. Hosted by FMS and Plante Moran on November 8 and 9 in Chicago, this innovative program will cover topics ranging from digital finance to best practices for Board communications to information technology and more, and will provide time for an open discussion of the topics of the moment. 

Space is limited, so don’t miss this opportunity to engage with your peers in a unique format – register today!
  


Contributors


Mark Loehrke
Editor and Director, Publications and Research
Email: mloehrke@FMSinc.org 



Danielle Holland
President/CEO
Email: dholland@FMSinc.org 



Autumn Wolfer
Director, Membership and Marketing
Email: awolfer@FMSinc.org


Hilary Collins
Assistant, Publications and Research
Email: hcollins@FMSinc.org