A few weeks ago, to begin “The Innovator’s Dilemma,” I shared the need for banks to think differently or risk becoming obsolete. This morning’s column builds on that idea by looking at some of the characteristics of top performing publicly held banks based on a research piece shared by Raymond James. I studied this list and realized quite a few of the “winners” leverage design trends, the second point in today’s post, to differentiate their messaging. My third and final point looks at technology expertise making its way into a bank’s boardroom — and provides an excuse to post a number of pictures from my time in Nashville last week.
Top of the (Performance) Pack
Recently, Raymond James presented its second annual Community Bankers Cup. This “award” recognizes the top 10% of community banks based on various profitability, operational efficiency and balance sheet metrics culled from a pool of 302 publicly traded community banks with assets between $500 million and $10 billion. What we see in the firm’s recap is superior financial accomplishment drives superior stock price returns. These 30 banks (e.g. Eagle Bancorp, First Financial, etc.) demonstrated exceptional results “on a relative basis in one or more of the following measurements of financial performance and stability: non-performing assets to loans and real estate owned, five-year average core deposit percentage, net interest margin, efficiency ratio, return on average assets, and return on average tangible common equity.” If you are looking for examples of strong + healthy banks that have taken creative ideas to build a business, and subsequently monetized them, take a look at what the Raymond James team writes about these 30 institutions.
Ahead of the Curve
Since the beginning of the most recent global financial crisis in 2008, Getty Images has been tracking the changes in imagery used by financial services providers to represent their brand. In their words, “gone are the depictions of aspiration and conspicuous wealth as financial services brands try to re-establish trust with their customers.” In their place comes creative uses of community support “set-up for the long-term to demonstrate their responsibility for local businesses, communities and the environment.” Take a look at this “visual trends in financial services marketing” to get a truer sense of what’s working for bank marketers today.
Surprisingly Staffed
Last week, our team welcomed 117 bank officers and directors to the Hermitage in Nashville. At this spectacularly Southern hotel, we went a bit old school and put pen + paper in front of these decision makers to ask five technology-specific questions. I don’t normally equate technical proficiency with a bank’s officers and directors; however, the vast majority of attendees shared that their executive team has at least two people with strong technology understanding/experience. While a small sample size, more then 50% of these key leaders responded to our query… and the results underscore, in my opinion, the importance being placed on technology at community banks. In addition, I did hear from several Chairmen that they are adding outside directors with an understanding of issues like cyber security risk and how to oversee vendor management. If you’re interested to see what an event looks like from my POV, here’s a look (photos courtesy of Don Wright Designs & Photography)
Aloha Friday!
About That Ratio 