7 Big Strategic Planning Questions Bankers Must Be Asking Now

In boardrooms around the world, senior leaders are scrambling to set the strategic direction for their financial institution. But when senior leaders aren't brutally honest about where their organization needs to improve and innovate, their strategic plans are doomed to fail. Here's what needs to be on their radar, and the hard conversations they need to have.

1. Is Your Institution’s Data Analytics Up to Speed?

“Most financial institutions are still trying to attract all consumers with all things financial,” says Mark Weber, CEO and Chairman at Weber Marketing Group. Instead of “trying to acquire everyone in the market,” he says institutions must be developing greater data literacy in order to better identify and target those consumers who represent the most potential.

“Savvy leaders know which segment of their target audience is the most engaged — and most profitable.”
— Mark Weber, CEO of Weber Marketing Group

“Savvy leaders know which segment of their target audience is the most engaged — and most profitable,” Weber explains.

According to Weber, data from both internal and external sources must be plumbed to assess buying triggers, experience drivers, channel preferences, market perceptions, and competitive opportunities for your institution.

Joe Sullivan, President and CEO at the Market Insights, is among the army of consultants like Weber that emphasize the strategic importance of data analytics in banking.

“Smart, efficient collection and analysis of data must become a core capability if financial institutions hope to achieve and maintain competitive advantage,” says Sullivan. “Accessing and augmenting consumer data must be seen as a strategic priority if banks and credit unions are to understand — and address! — consumer demands for increased personalization and experiences that deliver instant gratification.”

“Knowing everything you can about who you serve is going to be table stakes,” Sullivan cautions.

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2. When Will Your Digital Transformation Journey Be Complete?

For a long time now, banks and credit unions around the world have known how desperately they need to overcome the drag created by their legacy systems. Senior leaders in the banking industry have to decide if their commitment to change has been sufficient, or if it must be stepped up.

“Engagement in the financial services industry is all digital,” says Susan Mitchell, CEO at Mitchell, Stankovic and Associates. She believes mobile will move market share in all areas, so that no institution can consider itself unexposed to strategic risk here.

“Banks and credit unions are moving in this direction, but smaller organizations with limited resources to fund development are being forced to play catch up.”

“Digital transformation must be a key priority,” says Joe Sullivan. For all that’s been written about this issue, he says, many institutions still take a “wait and see” attitude and fall further and further behind.

While many blame their core processor’s slowness, “this cannot be an excuse for not aggressively moving forward,” Sullivan insists.

Brandi Stankovic, SVP-Strategic Advisory Services at CU Solutions Group, says many institutions have yet to consider partnering with fintech firms, which among other things can help them offer nontraditional services.

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3. What’s Your CX Strategy?

Stankovic says good service is not enough by itself anymore as a factor differentiating one institution over another. Today, CX is the competitive battlefield in the financial industry. The experience each banking provider delivers is the only thing that separates one from another.

“How can financial institutions compete without a distinctive customer experience?”
— Susan Mitchell

“Institutions without a distinctive experience will not be able to compete,” warns Weber. “It will become increasingly more challenging to compete as leaders drive huge experience distinctions, and when fintechs keep making single applications incredibly easy.”

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4. Is Our Financial Institution Dying of Old Age?

According to Susan Mitchell, banks and credit unions have to ask the question: “What percentage of our deposit base is over the age of 60?” This vulnerability must be assessed.

Mitchell also says institutions must discuss whether “generational loyalty is a thing of the past.”

For credit unions, Stankovic says a key planning item is member growth, including the question of seeking charter expansions and merger strategies to widen the net.

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5. How Big is The Cultural Disconnect Between Strategy and Skills?

Your staff will be the foundation for everything in your strategic plan. But Jeff Marsico, EVP at The Kafafian Group, worries that there is a big gap between the skills staff have today and the future strategic direction that financial institutions must head.

“Does an objective assessment of employee skills match what the institution wants them to do in the future according to their strategic plan?” Marsico asks.

Marsico says that technological catch-up is critical, but institutions spend perhaps 10% of their operating budgets on this. Meanwhile, they spend over half of their budgets on people.

Key Question: Are you getting the strategic ROI you need from your investment in people?

An institution’s employees and its culture are intertwined, so when a financial institution considers evolving its culture, issues of retention and recruitment will also arise.

Ultimately “culture determines how things gets done,” adds Joe Sullivan.

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6. Is Branding a Strategic Priority?

A key element for marketers, but ultimately critical for the entire institution, is the question of “Who and what are you — and what do you want to be?”

“You need to weigh where you’re performing best and least, and which internal perceptions and external perceptions are consistent — and where the gaps are among various groups,” says Mark Weber. “Are your mission and core values still relevant, integrated into the culture, and inspiring to your team in recruiting, empowering, and retaining employees to work towards something greater than their paycheck?”

( Read More: 10 Of The Best Banking Brands To Watch )

7. Is The Senior Leadership Team Capable and Comfortable Innovating?

Taking a sober look in the mirror is critical today, the experts say. Sometimes it’s not a matter of gray hair, but gray ideas.

Diversity in the boardroom is a critical issue frequently cited by multiple analysts in the banking industry, but the matter goes way beyond age, gender and ethnicity. A diversity of backgrounds, expertise and thinking will help institutions adapt to the future. In other words, financial institutions need leadership teams that reflect a diversity of ideas.

“Successful adaption will require new business models to arise,” says Mark Weber. “I expect we’ll see more capital leveraged into new ideas, like PenFed Credit Union’s recent acquisition of a digital agency, and more funding for innovation teams and internal fintech incubators. Boards should be thinking in new ways like these.”

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This article was originally published on September 17, 2018. All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.

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