Banking

Employees need to feel inspired by the company mission and values, because raw talent is meaningless without the will to create results. - KISSMetrics

John F. Kennedy once said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.” Over the past couple months, we’ve taken an in-depth look at why it is important for banks to anticipate the future by making use of hard trends like technology advances, demographic change and globalization. 

By 2020, Millennials will account for $1.4 trillion in spending. That’s a massive increase from annual current levels of about $600 billion. Already, this generation is 80 million members strong, and their measurable impact is growing exponentially as they age into adulthood.[1] This demographic thinks differently about money and banks than their predecessors. They are financially informed, and prioritize quick, convenient and mobile banking solutions.

“In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.”

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Eric Hoffer, Philosopher

As discussed in our previous blog, Strategy Unlocks the Window of Opportunity, failing to recognize and plan for opportunities often leads to missed successes and the dreaded what if. As Hoffer eloquently observes, it is those who stay focused on learning and developing a strategy to capitalize on change that are best equipped to secure growth and prosperity long into the future.

How’s this for a statistical wake up call? By 2020, it is estimated that one in three Americans will be labeled a Millennial – and by 2025, 75% of our workforce will be composed of Millennials. They may take a bad rap, but there’s no doubting it – Millennials are the future leaders of American business. It’s probably why there is so much discussion around how to attract and retain this large, active demographic as a customer base.

Over the last three months, the HORNE Banking team has hosted a series of webinars focused on various growth strategies within the banking industry. We started by exploring the uptick in mergers and acquisitions activity with Christopher Olsen at Olsen/Palmer and moved into a discussion with John Mabry of Keefe, Bruyette & Woods about opportunities available for banks looking to go public.  

The common theme across these discussions is the increased growth potential for banks that have a vision of who and where they want to be in the future. The institutions most likely to succeed are working toward clearly set goals with flexibility, discipline and focus. 

A 2014 piece by Intuit Quicken reported that in a national financial capability study performed by FINRA, participants were asked five questions related to everyday personal finance and economics - 61% of the participants were unable to correctly answer more than three questions.

In the recent webinar “Building a Successful M&A Strategy,” co-hosted with Olsen/Palmer, we explored the current mergers and acquisitions (M&A) landscape and its impact on the banking industry. The discussion highlighted a compelling shift in the advantages of smaller banks to capture new growth opportunities. Over the past three decades, we’ve seen the average size of buyers steadily decrease while the average size of sellers has steadily increased.

In chess, each player must strategize the exact right moves to defeat the opponent. Getting to make the first move may be the greatest advantage. In business, as in chess, first movers often gain momentum by grabbing market share before others get into the market.

Recently, I had a great reminder of the art and importance of communication. I am an avid (okay, borderline obsessed) golfer. I am constantly trying to figure out ways to better my game, with an ultimate goal of lowering my handicap to a three.

Last weekend, my wife, teenage daughters, and I took part in Toyota TeenDrive 365. Toyota offers this interactive defensive driving education program with a stated goal of creating the next generation of safe drivers. 

It seems every time you turn around, there is a new regulation creating unique opportunities, challenges and risks for banks. The new Basel III capital rules are no different, and for S corporations the capital conservation buffer could have a significant impact on future tax distributions.

Mergers and acquisitions (M&A’s) represent a great opportunity to increase the value of your bank and to achieve quick growth. For those reasons, there continues to be a rise in the number of M&A deals.