Banking

Berkeley, California in the 1960s was a radical place. The vibrant, politically active culture would inspire future generations to challenge the status quo and stand up for their beliefs. It was during this charged, forward thinking era that a Dutchman named Alfred Peet opened a small store in Berkeley selling coffee beans. 

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.

Psychologists estimate that roughly 80% of your day is filled with negative thoughts. In the current economic and regulatory environment, it might seem like 100% for bank executives!

Data is more prevalent than ever, but according to a report from EMC and Forrester Research organizations are just starting to scratch the surface with only utilizing less than 5% of their available information. The biggest barrier holding organizations back is cost of implementation.

Make no mistake; Big Data is the business/technology/marketing buzzword of recent years. Ironic, because there’s so much debate about what that term means and even more discussion about what you can do with it.

Do you want to have one of those awkward board room discussions? If so, bring up the topic of board member term limits. As I type this I can hear my two girls in their high pitch voices saying…awkward!

Are you among the multitude of banks that have faced the question “Does our tax refund belong to the bank or holding company?” Well, on Friday, June 13, Federal regulators issued final supplemental guidance on income tax allocation agreements involving holding companies and insured depository institutions. The issuance represents regulators’ efforts to eliminate confusion and bring closure to the debate around the ownership of tax refunds. 

As a Board member, am I highly engaged in my bank’s activities or am I focused on the basic requirements? As the overall banking environment continues to evolve and as regulations remain high, board members can offer insight that is very impactful.

We have discussed five key components to consider in an incentive compensation plan. The viewpoints addressed in that blog and the increased scrutiny placed on bank executive compensation made in an article in the Wall Street Journal really stand out in its contrast. It pointed out that, on average, bank regulators make more than bankers. Not just a little more. The average bank regulator earns 2.7 times more than the average private banker.  And this multiple has been increasing since the passage of the Dodd-Frank Act in 2010. 

In today’s banking environment, new challenges surfacing with the slowly improving interest rates are requiring more focus on interest rate and liquidity risks.

In light of the recent data breach at Target, IT risk buzz words are swirling the banking industry, and rightly so. The cost of a security breach can cripple any business and, certainly, a financial institution. 

I was recently heading home on I-40 from Nashville and couldn’t believe all the potholes. The cold winter in middle and west Tennessee has wreaked havoc on the roads, and I found myself continuously dodging potholes so I could have a smooth, comfortable ride home. 

About 50 miles from my exit, traffic came to a screeching halt. After sitting in what had become a huge parking lot for about 10 minutes, traffic began to move very slowly for the next few miles. I was anxious to get home and was seriously annoyed. 

When I finally got close enough to see what caused the delay, I realized it was a road crew working on the potholes. I immediately thought, “Why can’t they do this at night when nobody is on the roads?” That’s when it hit me – I didn’t want the potholes on the road, but I selfishly didn’t want them fixed at a time that might inconvenience me.

In Part One of our look at bank board leadership, we examined the merits and criticisms of the “Jeopardy Jerk,” Arthur Chu. He bucked the traditional game show system by board hopping with no apparent process logic. Chu deployed a perfectly allowable and extremely effective technique, yet it was criticized as a system hack because it was different, and (more to the point) other players were nearly defenseless against the strategy. 

As we think about the banking industry, “hacking the system” is a very relevant leadership strategy.