10 Key Trends From the Banking Trenches

10 Key Trends From the Community Banking TrenchesBank 2.0 Webinar Series7 March 2012 bradley @leimer

ten key trends from the community banking trenches

Bradley Leimer leads online and mobile strategy for the California based Mechanics Bank. He brings additional perspective from time leading marketing and business development teams in the credit union industry and through a decade driving big data and database marketing analytic services for national and regional bank clients.

You can see his thoughts on engagement banking and social channels on American Banker, his blog, and other financial industry sites.ndustry sites.

About Bradley Leimer

http://www.americanbanker.com/


http://bradleyleimer.com/

https://plus.google.com/110773742023799701774/posts

http://www.linkedin.com/in/leimer

Our latest white paper on Engagement Banking is available for download at:

banking.backbase.com/adv/futureofbanking-whitepaper.php

http://banking.backbase.com/adv/futureofbanking-whitepaper.php?src=slideshare-005









our markechanged

environmentcompetition customermarketingdesigndatacustomers behaviortechnology partnersmodelutilityEfficiencycontentconversation


our industry is

doomeddumb pipesunder siegerecoveringgrowingpoisedpivotingstrongerinnovating


BofA feeasco occupy banks move your money

occupy wall street bank transfer day

customer behaviortechnology disruption dissatisfaction


"I'll be damned if we don't have record profits in next year or two." Jamie Dimon, CEO JPMorganChaseY2011 $18.98B net income


+ returning to profitbuilding balance sheetsexpanding relationshipsredefining communitygrowing deposits

- need to replace non-interest income (down 7.4%)

decrease profit reliance on reduction in provision for loan loss

loan growthcustomer/member growthinnovation, regulation

+/- leveraging technology managing COF, riskefficiency gainsstill adding branches98,201 J201181,273 J1994 (+21%)consolidation/M&Aredefining “banking”

U.S. Banks (FDIC)

Q4 2011Banks $26.3B profit (Up 23% from Q4 2010)Biggest quarterly increase in four yearsLoans and deposits both grew 1.8% Assets up 0.6% 54 institution mergers, “only” 18 failures

Y2011Banks $119.5B in profit in 2011 Average ROA 0.76% (increase from 0.64% in 2010) 63% of banks reported increases in net income in 2011 Largest 100 banks (1.5%) ~ 80% of deposits, 75% of loans

U.S. Credit Unions (NCUA/Federal Insured)

Q4 2011CU Profit $6.41B (Up 4.3% from Q4 2010)Loans grew 1.2% Deposits up 5.2% Memberships up 1.5% (91.8M)

Y2011CU $16.3B in profit in 2011. Average ROA 0.68% (increase from 0.66% in 2010)


Here are the simple facts: By the end of this decade there will be 40% fewer banks and 50% fewer credit unions.David KersteinPeak Performance Consulting Group


The number of banks declined from 18,000 in 1984 to 7,357 at year end 2011.

2020 projections show only 4,490 banks remaining.

The consolidation of credit unions is even more dramatic — virtually a straight line 27 straight years.

There were 15,193 in 1984 but only 7,094 at the end of 2011. This number will drop to 3,500 in 2020.

Source: David Kerstein Peak Performance Consulting Group


2020 U.S. Banking LandscapeBanks/CUs+/- < 8,000 institutions; more dynamic+ focus on partnering/industry level applications+/- smaller branch footprint/market niche focus+ mobile/untethered; + contextual proximity focus+ checks racing toward zero; Cash digitized/mobilized+/- focus on service/experience/efficiency gains+/- new revenue streams around payment/merchants

Fintech Providers+/- additional consolidation +/- competition for clients- larger barrier to entry + sources for start-up funding+/- innovation seeking new revenue opportunities+ security, simplicity, automation key drivers

Consumer/Businesses Client Experience- Pressures to replace non-interest income = fees- efficiencies reduces ‘free’ or ‘reward’ product focus+ instant payment & money management options+/- mobile / social connectivity + purchases = contextual marketing, personalization+/- product/revenue innovation (directed @ POS)


Michael Degnan, SapientNitro Engagement Banking Lead, Financial Services Center of Excellence

engagement banking is a new marketing, sales and service model that deploys technology to achieve both customer intimacy and scale.


“Banking is now something you do, not somewhere you go.” Brett King Bank 2.0 and Branch Today, Gone TomorrowFounder, Movenbank









‘Why do you think you can work in the financial industry?’ That’s exactly why we’re going to do so well—the financial industry is built

around blockers and people saying no.”Jack DorseyNew York Magazine March 2012


“I’ve finally cracked it.” Steve Jobs


“I skate to where the puck is going to be, not where it’s been.” Wayne Gretzky









1

2

3


12


3

4


Contextual/Semantic Search

1

2

34


“(U.S.) Financial institutions lost at least $873M, conservatively, in potential revenue, as 5.8 million customers attempted - and failed – to open accounts online” Javelin Strategy & Research — “2011 Online Account Opening: Faulty Process Hobbles FIs in the Battle for Customer Acquisition, Profitability and Retention” Oct 2011


Bill Pay

A2A / Online Only

P2P / Online Only

Aggregation / PFM 1.0

Online Banking

Services

Mobile Banking 1.0 Tablet Banking










Branding Removed




can we change enough?

Call to ActionTake one idea you had during this presentation and let me know how you will improve your bank, credit union or financial application.

While we only had time to cover a short list of topics today, if you see additional trends that matter to your business, contact me to discuss.

W 510.741.3565M 510.684.1041

[email protected]

@leimer

linkedin.com/in/leimer

http://bit.ly/pT2MVL

Bradley Leimer leads online and mobile strategy for the California based Mechanics Bank. He brings additional perspective from time leading marketing and business development teams in the credit union industry and through a decade driving big data and database marketing analytic services for national and regional bank clients.

You can see his thoughts on engagement banking and social channels on American Banker, his blog, and other financial industry sites.

About Bradley Leimer

10 Key Trends From the Community Banking Trenches 7 March 2012, 10:00 PST

Bank 2.0 Webinar Series



http://bradleyleimer.com/

https://twitter.com/

https://plus.google.com/110773742023799701774/posts

http://www.linkedin.com/in/leimer