The Daily Dividend

News, notes and insights from around the industry

OCTOBER 17, 2018
The New Risks
By Hilary Collins, Specialist, Publications and Research, Financial Managers Society

Over one-third of the U.S. workforce is Millennials, and their preferences and behaviors are changing the way organizations approach compliance and risk – or at least they should be. 

Three out of four Millennials and Gen Zers would rather text than talk, and can’t stand long, time-consuming processes. But in the race to accommodate the speed and convenience these younger generations prize, some financial firms can open themselves up to new risks on new channels.

Regardless of how close to the cutting edge an institution is (or thinks it is), every bank or credit union should have a formal policy telling employees exactly how they can communicate with customers and what channels they should avoid. A documented policy not only helps to protect the institution, it also clarifies expectations with customers and employees.

Regulations demand that financial institutions retain and supervise all electronic communications their employees are using to conduct business, leading some organizations to all but forgo quick, convenient communications like texting in order to comply and manage potential data breach risks. One option to combat these concerns is to build a platform specifically designed to communicate digitally with customers and employees. While not necessarily a solution that is feasible for every company, it’s worth considering as a smart response in a world where texting is how many people talk.
 

OCTOBER 16, 2018
Chapter Happenings
By Mark Loehrke, Editor, Financial Managers Society

The year may be winding down, but FMS chapters have been busier than ever. Even before many shift into the season of traditional holiday gatherings and charity events, there continues to be plenty going on this fall.

September was an especially busy month all across the country, starting with the new Dallas-Fort Worth chapter, which continued to take root in the heart of Texas, as it staged its second official event – a presentation on cybersecurity – for a diverse group of local professionals. Meanwhile back east, the reigning Chapter of the Year in Philadelphia hosted a sweet and successful East Coast Regional Conference in Hershey, Pennsylvania, featuring three big days of networking and educational sessions on stress testing, CECL, liquidity management and much more. And in the Midwest, the Chicago chapter hosted another successful Fall Education Forum with presentations on business ethics, CECL implementation and tax reform – followed by a terrific Happy Hour, of course.

But there’s plenty more to come in the weeks and months ahead. The New York/New Jersey chapter has a busy schedule, with a dinner meeting in Hackensack on October 24, a networking and new member social in Wayne on November 15 and a half-day seminar in Asbury Park on November 27. Elsewhere, the Wisconsin chapter is hosting its Fall Education Seminar in Milwaukee on November 14.     

So get out this fall to discover what FMS chapters are all about, and be sure to keep an eye on the education calendar as additional chapter events come online!
 

OCTOBER 15, 2018
FMS Perspective: Strategic Uses for Customer Profitability Results
By Hilary Collins, Specialist, Publications and Research, Financial Managers Society

Many accounting and finance professionals spend most of their time focused on delivering accurate financial reporting, but less time determining how the information will be used by the business units tasked with driving the institution’s success. As a result, there’s often not enough focus on how front-line employees should be using customer profitability data to effectively drive business decisions.

In his FMS Perspectives piece “Strategic Uses for Customer Profitability Results,” Brad Dahlman of ProfitStars offers tips for how to incorporate customer data into your business strategy – and how to give your front-line staff actionable ways to engage those customers.
 

OCTOBER 12, 2018
The Risks Ahead
By Mark Loehrke, Editor, Financial Managers Society

The Risks AheadWhile the Fed’s most recent interest rate hike may not seem like much of a big deal in the near term, at least one industry observer believes the more significant impact of the overall trend in interest rates for financial institutions may be coming soon. 

Christopher Whalen says the real concern among banks and credit unions as interest rate spreads tighten is that plenty of non-bank financial companies – such as mortgage lenders – may soon be facing a serious liquidity squeeze. With the cost of funds rising as a result of the pressures bearing down on these highly leveraged players, net interest income for financial institutions is bound to take a hit. 

When it comes to opinions on how the Fed manages monetary policy, of course, everyone has their two cents to pitch in. But whether or not his dire predictions for how the rest of the dominoes may fall actually come to pass, Whalen’s observations on how the Fed is moving forward are certainly worth considering – especially as many banks and credit unions are seeing first-hand evidence of the liquidity issues that may be bubbling beneath this seemingly healthy economy.
 

OCTOBER 11, 2018
FMS Webinar: Using Spreadsheets to Implement CECL
By Hilary Collins, Specialist, Publications and Research, Financial Managers Society

As financial institutions across the U.S. grapple with the reality of implementing CECL, one thing is becoming clear – spreadsheets will be a key element of implementation for many. Because of their power, flexibility and ease of use, spreadsheets remain a valuable tool for many institutions – but when it comes to CECL, the challenge is making sure they’re reliable and compliant.

If you’re considering your options for implementation, join us for an FMS webinar on Wednesday, October 17, as Jeremy Condie of ClusterSeven navigates the risks of "Using Spreadsheets to Implement CECL". Learn whether spreadsheets are a good fit for your CECL plans, and how to best to address the risks of using them as part of your implementation strategy.

As always, this webinar is complimentary for FMS members. (Not a member? Join today!)
 

OCTOBER 10, 2018
The Power of Kindness
By Hilary Collins, Specialist, Publications and Research, Financial Managers Society

The Power of KindnessIf you enjoyed our story on “The Power of the Mind” in the September-October issue of FMS forward, here’s a follow-up on how values like compassion and selflessness make better leaders. Research continues to prove that kindness is an important factor for organizational success.

Kindness boosts performance
Studies show that when work culture is pleasant instead of fearful, employees provide better customer service without prompting or incentives, and develop better work relationships. Better relationships with customers and coworkers unsurprisingly increase productivity levels. Another study showed that empathy and kindness boost innovation and learning to levels that aren’t possible in negative, fearful workplaces.

Kindness reduces turnover
Research shows that fairness, supervisor supportiveness and favorable job conditions reduce turnover and increase retention. When employees feel that they are supported and valued by their organization and their supervisor, they are more committed and satisfied. 

Kindness improves culture
This goes without saying. In a kind culture, employees feel connected to each other, supported by their leaders, and willing to help their customers. This improves communication, builds stronger relationships, and keeps people around longer. Kindness shouldn’t be taken as a sign of weakness or poor leadership, but rather embraced and encouraged at all levels—research shows that it’s worth it.
 

OCTOBER 5, 2018
Fee v. Free
By Hilary Collins, Specialist, Publications and Research, Financial Managers Society

Fee v. FreeIf you’ve watched IZALE’s recent FMStv episode, “The Case to Convert to Fee-Based Checking Accounts”, you probably know there’s a strong argument to be made for moving away from free accounts. New research and a case study now back up that argument.

A recent study found that almost half of Millennials in their 30s said they would pay a monthly fee for an Amazon checking account that included cell phone protection, identity theft protection and travel insurance, among other benefits. Further, roughly 60% of all respondents said they would consider switching accounts if their current financial institution offered this kind of checking account with bundled services.

Heritage Bank, an institution that recently migrated to fee-based checking accounts, found its retention remained strong and the reaction from customers was largely positive. In the past, the bank offered 17 different checking accounts and strongly pushed its free account. But since those free accounts weren’t helping to differentiate the bank from its competitors, Heritage decided to begin offering three fee-based checking accounts as well. Two of these offered benefits like cell phone protection and roadside assistance at no additional charge to the customer. While some customers did choose to leave, 93% of balances remained, and the bank saw a rise in average balances and an increase in fee income.

The takeaway? With so many customers happy to shell out a monthly fee for subscription services like Netflix and memberships like Amazon Prime, they’re more likely than ever to also see the upside of a fee-based checking account that gives them a greater value.
 



Contributors


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



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




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