Small businesses are a big business for many bankers around the globe.  As the consumer segment no longer provides the extraordinary growth it once did, members are putting great pressure on other key segments to make up for the lost growth and profits.   

In late April, we will share the findings from our investigation of the small business customer experience.  Until then, we want to share one of the most provocative findings from our work—the return of the Trusted Advisor.   Read More »

Five bank branches will close every week over the next six years in Britain due to irrecoverable operating costs, according to The Campaign for Community Banking Services.  This forecast comes at a time when the number of bank and building society branches has already fallen by nearly 11% during the past five years.  The news from North America does not get any better.  Since 2010, more bank branches closed than opened across the United States for the first time in 15 years.

More than ever, Business Banking Executives are under fire to ensure a positive ROI on their branch presence.

Across the last few months, we’ve engaged in conversations with banks from around the world on their branch-based business banking capabilities.   The most progressive banks are focused on the following strategies to grow branch sales:

1)     Working Back from Customer Types and Needs: The most progressive banks are focused on understanding the profiles of customers they can serve given current offerings and risk appetite.  By defining business owner market segments using non-financial metrics (e.g., number of product holdings or business complexity) these banks are better able to predict how different customers might apply their services.  Providing this visibility to branch staff increases their ability to understand business owner needs and tailor their customer/prospect conversations to ensure sales success.

Review basic customer profiles and types based on a survey of Business Owners to kick-start or better align your own bank’s practices in this area.

2)     “Being there” for the Small Business Owner: The continuing financial crisis has deepened the relationship gap between business banks and small business owners.  Small Business owners’ cite, unexplained drops in credit facilities, and a general lack of service presence as key issues they are having with their banks.   Focusing on rebuilding this trust is helping progressive banks win back SME market share.  Identifying target customers based on the banks risk appetite and proactively marketing services to these business owners not only helps elevate the banks brand but also provides a sense of exclusivity to business customers that drives trust and loyalty.

Read how Morse Bank integrates itself into existing supplier relationships and creates value in its customers’ financial interactions with their vendors.

3)     Hosting the Community’s Business Activities: It is no secret that small business owners are big users of advice and services.  They interact with a number of professionals and other business owners to get information, advice, and a sense of benchmark to measure their own performance.  Conventionally, this fact is what drove up the service to sales ratio for business banks and made it difficult to recover investments made in the branch network.  Progressive banks, on the other hand, are putting themselves at the center of such activities through creative and cost effective products and services.  By hosting community days for business owners and professionals at local branches or providing solutions that help entrepreneurs in business interactions outside of the banking networking, these banks are ensuring their presence and centricity in local communities.

Read about new product innovations and designs to keep informed on the latest customer offerings by business banks.

Starting your role as a CFO during boom or bust economic times inevitably impacts your career.  According to a recent article in the CFO Magazine, CFOs who enter the labor market during an economic downturn tend to enjoy less success than those who begin their careers in a buoyant economy.   These recession-time CFOs tend to face more internal and external head winds that are not under their control.  Due to uncertainties in the business environment these CFOs are further held back by their conservative management styles, spending less on capital investments, and research and development.

For business banks this is a clear opportunity to show value; few other business customers have a clearer objective. New-to-seat CFOs need to show good results to their senior management teams and they need to do this quickly.  Helping these CFOs succeed in their jobs can be hugely beneficial for the overall health of the relationship and future earnings for the bank.

But, helping these CFOs won’t be easy.  Recent Board research reveals that when an RM interacts with a CFO as the primary point of contact, the expectations of the RM are very high.  CFOs want to challenge the banker on the business needs and the RM must challenge the CFO on the best way to address them.  This tension demands that the RM be equipped with great solutions and great knowledge of how they deliver value.

Learn how your RMs can succeed in these critical CFO interactions by showing value where it is most needed.

Interested members should also read how Weymer Bank focuses on helping customers reduce a key cost element —interest rate exposure—thereby convincing them of the value the bank can add beyond traditional loan and deposit products.

Sales performance is as much a function of individual productivity as it is about managing an organizational ecosystem that helps sustain optimal performance.  This ecosystem includes factors such as manager coaching to help direct RMs, incentives to make sure everyone works toward common outcomes, and sales tools to make sure everyone has the resources to sell and serve customers.

But these factors alone will only get you so far.  True high performance requires that key components of your ecosystem are pointed toward a limited and specific set of activities.  For example, we’ve found that best-in class sales ecosystems include a manager coaching program that:

1. Tailors coaching conversations toward the key weaknesses in RM skill sets

2. Encourages a regular and face-to-face dialogue with clear next steps

3. Cleary distinguishes coaching from other management routines

To help you assess and measure the extent to which your sales organization is aligned with the right attributes across key areas, we’re pleased to announce the launch of the Anatomy of a World Class Relationship Manager Sales Force.

Understanding the drivers of RM performance as distilled from our benchmarking work across the previous two years, we’ve identified 22 critical areas which impact sales performance and further catalogued best practices within each to help you determine your gap-to-best practice levels.

Stay tuned across the coming weeks as we share some of the other 22 areas we’ve uncovered and key attributes within each of them to help differentiate standard from best practice.  In the meantime, if you are interested in learning more about all 22 sales capabilities and/or administering this assessment across your own organization please contact your Account Manager or me at merchana@executiveboard.com.

Sixty-five percent of small business owners say that their bank is more important than their individual RM.  Given the business as well as political need for banks to focus on this sector of the economy, how are Executives going to grow revenue from customers who do not value the primary delivery channel – the Relationship Manager?

Join us in London on February 8^th and 9^th, 2012 for the CEB TowerGroup Financial Services Conference where we will outline:

• Progressive banking tactics focused on moving away from credit sales and towards cash management for SME clients
• Tips and tactics on applying greater precision towards go-to-market activities and targeting customer acquisition
• Establishing multi-channel relationships with business owners who do not have time for face-to-face conversations with the RM

With Europe’s future literally teetering on the brink amid the sovereign debt crisis, executives must navigate seismic shifts in regulation, technology, and business behavior, many of which challenge the most foundational assumptions of the traditional advisory, sales, and service distribution models. Yet while there is growing acknowledgement of the need to change, there is little consensus around the type of change required, and even less on how we might go about accomplishing it.

The only certainty, almost three years on from when crisis first hit – things will not get better by themselves.  Uncertainty around global economic and business growth, if anything, has become more pronounced; learning from past mistakes, businesses are hoarding cash, slashing investments in new projects and minimizing borrowing costs; given rapid technological advancement, new ideas have become new competitors, with niche non-bank players already competing in the online and mobile payments space.  Alongside a number of high profile keynote speakers, the conference will offer a series of executive work-shop sessions to drill down on the following key competitive challenges in the commercial bank:

Help Relationship Managers Succeed: Stop trying to deliver trusted advice to business customers and start providing what they seek at the right time.

Analyze Innovations in Business Banking across the Globe: Learn how to help your business clients achieve revenue goals and restore growth.

Boost SME Revenues through Branches: The branch is critical to the SME customer but remains under-utilized. Discover strategies to increase efficiency and sales.

Improve Performance using Prescriptive Analytics: From forecasting to decisioning, improve business results through the use of business analytics.

Implement Mobile Solutions: Realize opportunities the mobile channel presents for commercial customers including payments and social media.

Manage Operational Risk: Understand how to effectively manage capital and solvency requirements in the commercial bank while taking out cost.

Register for this free event today, or visit www.CEBTowerGroup2012.com for more information.. The decisions you make today will likely determine relative market positions for many years to come.

Online banking and payments offerings have been on the rise from banks around the globe as these institutions continue to fight for retail and business banking market share.  Myriad technology vendors have sprung to specialize in building and leasing online banking platforms to financial institutions around the world.

In its latest bid to maintain its position as a global business banking service provider, Citigroup has launched CitiDirect® BE Mobile, a mobile browser-based application allowing clients to receive notifications and authorize payments using their mobile phones.  Citi has built this technology in-house and increased its applicability by making it an open application capable of running on any operating system or platform.

Interested in business banking product innovation?  Check out our product innovation library where we profile dozens of the most novel offerings from banks around the world.

Relationship Manager productivity is and has always been one of the most crucial factors to ensuring success for Business Banks.   But, in the push toward greater growth through one dedicated RM channel, many banks have potentially over complicated their own delivery process.

Past Business Banking Board’s research has found that an average RM serving the needs of an average customer is expected to master a range of 25 different skills and liaise with 18 different internal partners during the regular course of their work.

Leading business banks unbundle customer relationship, favoring depth over breadth in order to maintain RM focus on acquiring and managing relationships whilst still providing existing business clients with solutions made for their specific business needs.

A few years ago we profiled a bank that took it a step further.

After evaluating its entire business banking activity chain, Arsenal Bank determined that the relationship manager would be wholly responsible for building knowledge about the customer while a new role, the solutions strategist, assumes responsibility for understanding the business needs and crafting solutions to solve them.

Contactless technologies are becoming increasingly popular in the transportation and payments markets because users can simply touch their payment device to a reader to complete a transaction. The allure of Near field communication (NFC) is that it can take this functionality one step further by emulating or even replacing credit and debit cards to allow the user to decide what account they want to use when making a payment via their mobile device.

For business banks looking to drive greater transactions across their customer-base, NFC offers the ability to provide business owners with payroll and payments solutions through the mobile banking channel. Read the Board’s latest research brief outlining three NFC programs being piloted across North American, including:

1. In person P2P payments
2. POS payments via payment card firms and/or Isis
3. POS payments via American Express/Payfone or Sprint

Sixty-five percent of small business owners say that their bank is more important than their individual RM.  Given the business as well as political need for banks to focus on this sector of the economy, how are Executives going to grow revenue from customers who do not value the primary delivery channel – the Relationship Manager?

At a recent meeting of SME Bankers from across the EMEA region, Executives discussed shifts in the business owners world and the strong need for their institutions to reorganize themselves in order to:

• Shift their focus away from credit sales and towards cash management for SME clients
• Apply greater precision towards their go-to-market activities and be more targeted in customer acquisition
• Establish a more multi-channel relationship with business owners who do not have time for face-to-face conversations with the RM

Successful execution in the SME sector will require greater agility from banks.  Review the Board’s framework and research on Executive mandates for growth in a new era of SME Banking.