Wednesday, March 16, 2016

Ready to Give up on Free Checking? Not so fast . . .

I’m hearing a lot about the demise of free checking in the bank and credit union environment.  Rising costs are cited, among other issues, but I think that consideration has to be given to the profile of customers who have free checking accounts.  If you are doing even rudimentary profitability analysis, you should be able to assess the impact of free checking on customer profitability.  A properly configured account will serve to modify consumer behavior in ways that reduce the costs of servicing the account.  This can be done without fees directed to the consumer.  Increased debit card use, email statements instead of paper, mobile or Internet access (instead of phone calls and voice response systems,) and automatic deposit of payroll or other credits are commonly thought of as components of a successful free checking account. 

One source I saw recently indicated that rising transaction volumes were a reason for FI’s to eliminate free checking. While per account volumes are rising, the increase is almost entirely attributable to electronic transactions, and these are not increasing your costs.  Debit card activity is eclipsing check writing, and virtually all debit card transactions are not only cheaper than checks, they often generate interchange revenue.  You want customers to use their debit cards, and a properly promoted free checking account will encourage such use.

If consumer accounts are important to your institution, free checking remains a great way to attract and leverage such relationships.  As always, understanding your costs and revenue opportunities is the basis for configuring and pricing accounts.   I’m available if you want to review and discuss these or other matters.

Trent Fleming serves as a trusted adviser to financial institutions on matters of technology, strategy, and management, and as an industry speaker. In his advisory role, he has helped hundreds of banks make good decisions about technology from a business perspective. Fleming’s presentations on technology, management, and strategy consistently get the highest marks from his audiences. He serves on the faculty of the Graduate School of Banking at the University of Wisconsin, and regularly contributes articles to industry publications. More information at ,, or @techadvisor on Twitter. 

Tuesday, March 1, 2016

Essential Speaking Topics from Trent Fleming

As you work to complete your conference planning for this year, I hope that you will consider the attached presentations as options for your groups.  I've included topics directed to CEO/Director audiences, as well as operations/technology, and marketing.  It would be my pleasure to work with you on any of these topics.

I'm grateful to the many of you who have already booked me for this year, and hope to add many more engagements to my 2016 calendar.

CEO and Director Focus

Four Ways CEOs Can Better Manage Technology
Technology has found its way into every aspect of your institution.
It’s no longer a “back office” only solution.  The successful CEO will embrace technology, and seek to actively manage it.  This session is designed to show you how: drawing on four key pillars: People, Strategy, Business Focus, and Security.  Participants will leave with a better understanding of how technology can be integrated into the organization, and managed as well as any other business unit.

Director Liability in a Connected World
Increasingly, bank customers, both business and consumer, are choosing electronic delivery channels over traditional branch banking. To support these demands, banks are investing in sophisticated delivery systems to provide real–time access for customers. In addition, banks are finding it increasingly important to manage their Internet and social media presence, as well as their Internet reputation across other platforms. Payment methods ranging from wire transfer to ACH to debit cards create the potential for significant fraud loss and also must be managed to mitigate risk. For business, corporate account takeover is a major threat. On the consumer side, card data breaches and identity theft loom large as sources of loss for banks. Finally, the increasing reliance on outsourced data–processing solutions means that banks are signing contracts that represent significant liability and exposure for early termination clauses, annual price increases, and de-conversion costs. This session will guide Directors and Executive Management in understanding the risk and exposure presented by today’s online environment and will also provide guidance to them as they seek to offer advice and oversight to bank management in addressing and managing such risks. 

The New Face of Strategic Planning:
Integrating Technology Into Your Enterprise Strategy
Historically, banks have had two strategic plans: an enterprise, or business plan, and a separate technology plan.  This is no longer tenable, as technology now becomes the driving force behind most strategic initiatives.  This session discusses methods of integrating technology planning into your enterprise planning efforts, providing insight to senior managers and executives as to the increasingly visible and important role technology plays in the banking environment.  Topics include selected new technologies, negotiating and managing vendor relationships, merger and acquisition planning, managing operations and technology staff, and engaging with customers to maintain strong relationships via electronic channels. (this session can be tailored for CEO/Director audiences, or Senior Operations staff.  I can also provide this as a Director Education or Planning Session, privately for individual banks)

Rural Economic Revitalization
Drawing on my volunteer work with various university-level economic development efforts, I have developed presentations to address how small towns can initiate efforts to revitalize their local economies.  One component of my work is a targeted presentation called “Small Towns and Small Banks” that is focused on CEOs of community banks and talks specifically as to how these banks can be catalysts for change that results in stronger communities

General Topics

Preparing Your Bank for the Next Decade
While the day to day pressures of managing balance sheets and regulatory requirements seem overwhelming, smart banks sense that the weight of competitive pressures make it even more important to develop and execute on strategies that will ensure their banks’ success going forward. this session will look at emerging trends in banking products and services, and provide keen insight into developing the infrastructure, tools, and staff needed to deliver them successfully. 

Managing Your Core Vendor Relationships
Your contract for services with your primary banking software provider defines a very important third party relationship with your bank.  Issues of exposure, liability, service levels, and yes, cost, are all in play.  Many banks have signed contracts with dozens of pages, without a careful review.  In some instances, the bank's attorney has been asked to review and comment on the contract, but absent specific software expertise, such a review may be cursory at best.  This session is not a legal review, but an operational one, of the implications of committing to selected aspects of the contract.  Participants will leave with insight into how to evaluate contract terms, and what areas to ask the bank's attorney to look into in further detail. These skills can then be extended to other third party contracts, further enhancing the benefits.   Today's focus on reducing expenses, and controlling costs, makes this session especially timely. Ideal for Operations audiences and CFO Conferences.

Alternate Branching Strategies: Leveraging Technology to Efficiently Serve Existing and New Markets
While community banks offer a wide range of electronic delivery channels, branch footprint remains a key component of service delivery.  This session will look at smarter ways to branch, including limiting physical plant investment, and utilizing a wide range of technologies to provide outstanding service across all of your markets. 

Developing Your Bank’s Call Center
Today, even small banks need a plan for centralizing customer contact and support.  As delivery channel options increase, customer demands for timely, knowledgeable support will increase.  A call center is the key, allowing you to offer a seamless, consistent experience when customers choose to call, email, tweet, or FB for help.  To augment this policy, banks must move to a “universal associate” model, whereby each employee with customer service responsibility is cross trained on all products and services.  This allows quick, accurate responses, and raises customer satisfaction, which in turn increases customer loyalty, along with the adoption of new technologies.  This session will guide participants in mapping out a plan to move to a call center model from wherever they are now.

Developing Your Bank's Mobile Strategy
Mobile Banking has quickly become an expected service offering for bank customers.  Consumer's desire to do more on the mobile device, combined with extensive advertising at a national level, have driven awareness and rapid adoption. In addition, our society is rapidly moving into a “Post PC” stage, where the mobile device (tablets and larger smart phones) will become the primary end user device.  In spite of this, there are banks who are yet to invest in this technology.  Many who have deployed Mobile Banking have done little beyond offering the basic product.  What is needed?  A strategy.  One that encompasses five pillars: technology, operations, compliance, promotion, and innovation.  This session will provide banks with the information and techniques necessary to select, implement, promote, and manage a broad Mobile Banking delivery channel, both now and in the future. 

Social Media's Place in Your Marketing Strategy
Often, social media channels like Facebook, blogging, and Twitter are talked about as if they exist in a vacuum.  This session is designed to provide overall guidance for marketing, public relations, and advertising for financial institutions, including traditional and  social media channels.  The session is offered with two options: a focus on tactical issues, including implementation, security, compliance, and management, or a CEO focused presentation to provide background, risk management advice, and guidance to management as they seek to oversee the bank's marketing, public relations, and advertising efforts.

Attracting and Retaining Profitable Small Business Customers: 
Packaging and Promoting Your Bank's Services
For many years, I've spoken to banks about the real battle in financial services – the fight for the profitable small business account.  This session looks at recent trends, including “free” business checking, and commercial cash management technology, and provides insight into ensuring that your bank has a plan to attract and retain business accounts.  Often, community bankers find that they have all the tools needed to compete on feature/function with the regional and national players.  What is lacking is packaging, promotion, and sales training.  Participants will leave with ideas that will allow them to address an overall strategy for the commercial marketplace.

Please contact me today to schedule one or more of these presentations for your group!


Tuesday, February 23, 2016

Thoughts on Fee Income: Merchant Processing Services

Virtually every bank I speak to feels the pressure to increase earnings.  In advising banks on such matters, I try to focus on items that are relatively easy to implement, and will generate a stream of earnings with minimal ongoing effort.  Merchant Processing Services fall into this category.  It’s this simple, really: every one of your business customers that accept debit and credit cards (and digital wallet payments) need this service.  Too many banks have the attitude of “we can provide that if they need us to” instead of very intentionally trying to be the primary provider of such services.

It is exactly this type of thinking that prevents you from collecting all the fee income you should.  Begin now to assess your current program in terms of pricing, functionality, and marketing support.  If it is not what you need to be competitive, look at renegotiating with your current vendor, or evaluate alternate vendors.  Get a program in place that you can be proud to offer.  Then, incorporate this service into all your sales training, calling officer preparation, and marketing materials.  Leverage the relationships you have to sell more Merchant Services to your existing customers, and make the product you offer a selling point for prospective customers as well.

Properly executed, this plan will generate fee income in two ways: signing bonuses for new accounts, and per transaction fees monthly.  A third benefit is a stronger, more exclusive relationship with your business customer.  These benefits alone should make you invest the time to focus in deploying a Merchant Processing Services program.

Tuesday, February 9, 2016

Comments on Fiserv Acquisition of ACI

A number of you have asked me about implications of the ACI acquisition by Fiserv.  Here are some thoughts.

By now you have seen news of the acquisition by Fiserv of ACI’s Internet Banking solutions group.  I want to address this at a macro and a micro level.  First, let’s take on the macro side.  The banking software industry has mirrored the banking industry itself, by consolidating.  We now have an oligopoly in banking software - three firms control a majority of the market.  In such an environment, further consolidation is almost inevitable, as the big players seek to drive more revenue from ancillary products.  You will see more of these types of acquisitions, as it becomes harder for third party, best of breed solutions to sell product into banks directly.

At the micro level, this is a win for Fiserv.  It gives them an integrated product that works across all platforms, and includes both business and personal Internet banking capabilities.  As mobile becomes increasingly important - to both consumers and businesses - demand for enhanced capabilities will increase.  Fiserv’s current setup features distinct products for consumer and commercial, creating an unnecessarily complex delivery channel.  If you are an ACI customer using a Fiserv core today, you may find that your product becomes the main Fiserv offering, rather than being replaced.  When you consider that Fiserv acquired fewer than 600 customers, many of who are Credit Unions, you will see that this was more than just an effort to buy customer base.  The product is important, and that’s good news for ACI customers.

Monday, February 1, 2016

Strategies for Success

As we move into the new year, I wanted to offer you some ideas for improving your bank that don’t necessarily require new investment in hardware or software.  I trust you will find some of them applicable. 

It’s hard to read any of the banking trade publications these days without seeing this word. It is in my top 5 overused words for 2015.  For most community banks, innovation can be a challenging word.  You won’t typically develop your own mobile applications, or write software to improve loan operations.  Let me interpret innovation differently then: think of it as improving the way you already use your information technology, like parsing data for a marketing campaign, or creating a new checking account product that appeals to a section of your current (or desired) customer base.  For example, use your report writing capabilities to parse your customers' payment habits, and learn where they shop most often in your community.  If the businesses you identify aren’t currently customers of your bank, perhaps there is an opportunity to engage them regarding the value of doing business with you.  Again, looking at payment habits, can you identify a group of customers who almost exclusively use their debit card rather than writing checks?  If so, they may be candidates for a streamlined checking account that better reflects their payment habits, and lifestyle.  

Finally, when thinking about innovation, be sure that you are pushing your software vendors for new products and services in a timely fashion, and for operating parameters (later cut off times for remote deposit or longer operating hours for your non-traditional branches) that allow you to compete effectively in your markets.  Allowing vendors to dictate your operating hours is not an ideal situation. 

Fee Income Opportunities 
One failing in our industry has been our consistent approach of giving away virtually everything, to the point that our customers have come to expect it.  As I told one banker a few years ago, “you already have free business checking . . . you just call it ‘we don’t charge for that’”  There are two areas to consider here.  First, improved collection of fees you are already due . . . NSF, OD, loan late charges, research charges.  There’s no reason not to impose such fees unless the bank is at fault for the problem.  Typically you are not.  For fees that are already published, start with your employees.  Help them to understand why we need to collect these fees, and give them training on how to approach customers.  In my experience, employees are often reluctant to impose such fees because of customer reaction.  These employees need guidance, and to be reminded that fee income is part of the bank’s revenue, driving salaries and helping offset overhead costs.  New services present a tremendous opportunity for educating customers that they should expect to pay for value when it is delivered.  “app stores” from Apple and Google have taught consumers to expect to pay in small increments for products that they want.  Leverage this mindset, and impose such fees when you begin to offer new products, including mobile capture, person to person payments, or other enhancements to your electronic delivery channels.  

Like many of you, I’ve been doing this banking thing for a while.  I’m in my fourth decade.  I always try to look for common concerns and considerations.  One of those remains staffing issues.  I know that I’ve written about this fairly recently, but I believe it is valuable to talk about it again.    Many community banks are overstaffed. (the numbers back me up - banks under 1 billion in assets tend to have 2 times the employees per million in assets that banks over 1 billion have)  At best, they aren’t staffed with the right people.  

A good bit of this issue is a result of poor HR practices that contribute to a tolerance of mediocre performance.  While I am not an HR expert, I know this for sure: it is impossible to fairly evaluate an employee’s performance if you have not established clear expectations for them.   

Most managers dread annual performance reviews.  As a result, such reviews are often late, done poorly, and contribute to an employee morale issue.  But if the manager builds a good job description, clearly communicates it to each employee, and uses that document as a means of continually evaluating employee performance, the task becomes easier.  Coaching events - positive and negative - are dealt with in a timely fashion, properly documented, and when annual review times comes around, both the manager and the employee will have a good idea of what to expect.  A much better situation than a hastily done performance review that leaves both parties with a bad taste in their mouth. 

Improving your managers engagement with their employees as it relates to performance reviews is a key first step in better management.  I believe just implementing these basic steps will go a long way toward improving both employee productivity and morale.  

As always, I stand ready to assist you with these or other matters.  Please reach out to me anytime. 

Upcoming and Recent Speaking Engagements
19-20: Kentucky Bankers Association Payments Symposium, Louisville
21: Private Event: Industry Update
8: Ohio Bankers League: Technology Conference, Columbus
18: Graduate School of Banking: IT Management School, UW-Madison, 
3: Ohio Bankers League: CEO Conference, Columbus
4: Southern Financial Exchange: Annual Conference, Memphis
11 Maine Bankers Association: Directors Forum Augusta
22 Florida Bankers Association: CyberSecurity Conference, Orlando
Trent’s Comments is published six times each year and provides insight into strategic topics facing financial institution executives. Please feel free to share this with your staff and colleagues. 
Should you not wish to receive this newsletter, simply send me an email and I will remove you. 

Thursday, December 10, 2015

Four Ways Executives Can Take Control of Technology

For many executives, technology is an increasingly complex and frustrating part of running a business.  Two things are certain, though: 

> Customers increasingly desire to interact via electronic channels

> There are significant impacts on your productivity and profitability if technology is properly managed.  

Here are some thoughts to help non-technical executives manage technology well.

First, manage your people well.  Clear job descriptions and regular performance reviews are the key to setting expectations and monitoring performance.  Remember: it is impossible to fairly evaluate someone’s performance if you haven’t clearly set out your expectations.  While “tekkies” are a bit different to manage, starting with the fundamentals will build a great foundation.  All staff must clearly understand the business you are in, and what is needed from technology in order to achieve your goals.  Solid HR fundamentals will help you communicate that.

Second, incorporate technology into your enterprise strategic plan.  For many CEOs, strategic planning for technology is an afterthought or a dreaded task.  Moving discussions of technology into your enterprise strategic planning will help you to leverage technology, by embracing its value and clearly defining how technology will support your business lines, both customer facing and internal.  Transparency about the strategic goals of your organization will help your technology managers to support those goals.

Third, demand a business focus from your staff.  Work to help them understand that technology without a clearly defined business purpose is of little value.  A simple business case document can be a great teaching tool to help your staff communicate the benefits of technology they propose to invest in.  Tying these efforts back to the clearly communicated strategic plan will pay great benefits in terms of having your team focused on the things that are important to you.  Keep it simple.  Insist that your IT staff communicate in plain language.  Challenge them to explain the workings and impacts of their systems in practical terms, rather than relying on buzzwords.

Finally, keep it safe.  Insist on a security and business continuity focus.  Efforts by criminals to gain access to your company’s data (and that of your customers) are never-ending.  Your security efforts must keep pace.  Place an emphasis on contingency planning and disaster recovery.  Your ability to preserve and/or recover internal operations and customer facing systems is critical to the success of your business.  Insist on written and tested plans that address the three main components of such planning:  prevention, impact minimization, and expedited recovery.  Businesses that suffer technology outages of three days or more are at risk of failure.  It is that important.

Instead of shirking from technology, embrace it, and seek to actively manage it for the benefit of your employees, customers, and stakeholders.

Trent Fleming advises executives on management and strategy issues.  He can be reached at or on Twitter @techadvisor

Monday, November 16, 2015

Fall 2015 Banking Newsletter: Planning for the Future of Your Bank

Building Your Next Customer Base

What are you doing to develop your next customer base?
Recently, I saw a statistic that for the first time in our 239-year history, more Americans live in cities of 100,000 and over than do not. This trend, a long time in the making, caused me to begin thinking about the impact on community banks, especially those in rural areas. My question to you is: what are you doing to develop your next customer base?

Complacently serving your current customers, without regard to what the next 5, or 10 years might bring, is a formula for disaster. 

Here are three things that you can do today to proactively build your next customer base:

            First, take steps to understand the demographic changes in your communities – city, county, region – so that you have data. It’s difficult to see change when you are in the middle of it, so step back and assess. Years ago, Al Stewart sang, “In the islands where I grew up, nothing seems the same, still you never see the change from day to day.1” Think about your current customers and evaluate the “age” of your deposits in terms of the age of deposit holders. Start early to convince the next generation that you can be their bank, as well as “mom and dad’s” bank.

Next, take steps to ensure the viability of your community.  In recent years, I have written and spoken extensively on Generational Transfer and its impact on community banks and the communities they serve.  Read more at  
Civic and business leaders can influence the viability of a community. Supporting and encouraging local businesses, seeking to attract new business, tourism, and educational opportunities are all ways that you can seek to maintain and improve the health of your communities. If your mayor and alderman are more focused on beautification than economic development, seek to change that by striking a balance with commerce. I’m all in favor of beauty, but it takes commerce to make a community thrive.

These are just a few thoughts for you on this important issue. As always, I stand ready to advise you in these and other matters. Please call on me anytime.
Finally, for your bank, seek to enter new markets with similarities to those that you already successfully serve, and look for new products and services that can enhance your presence in all markets.  Wealth Management, for example, is often overlooked, but can be a powerful way to strengthen and enhance existing customer relationships, forge new ones, and preserve them over time.

 (1) Al Stewart, On the Border from the 1976 album Year of the Cat
Upcoming and Recent Speaking Engagements
October 16
Missouri Bankers Association:
Young Bankers Leadership Conference, St. Louis
October 21
Nebraska Bankers Association:
Marketing Conference, Lincoln
October 29
West Virginia Bankers Association:
Operations and CyberSecurity Conference, Charleston 
My speaking schedule for 2016 is filling up -
Updates and booking at
Trent Fleming is an industry expert on banking strategy. He travels around the country, conducting seminars on a variety of strategic, management, and technology topics. He also serves numerous financial institutions as a trusted adviser in managing today’s regulatory and technology environment.

As a consultant, he has worked with hundreds of financial institutions to create strategic plans that are blueprints for success, manage the selection and implementation of new technologies, and provide insight to streamline operations and improve productivity. operations and reduce costs.

Trents Comments is published six times each year and provides insight into strategic topics facing financial institution executives.
Please feel free to share this with your staff and colleagues.
Should you not wish to receive this newsletter, simply send me an email and I will remove you.