Economic slowdown?

With rising interest rates, bank executives share their concerns about an economic slowdown. Recent headlines in the American Banker reinforce this sentiment:  

• Big-bank CEOs warn of recession risk
• Small banks doubt the Fed can avert a recession

With an economic downturn taking shape on the horizon, financial institutions can only count on the actions they can control to maintain margins and the health of their banks. Astute executives I meet with realize the intrinsic value of “controlling what
they can control.” They choose to address a future fraught with traditional risks as well as risks driven by unusual events in today’s tumultuous world: the war in Ukraine, extreme weather swings, and erosion of confidence in government institutions.

What you can control

Economic slowdowns often lead to more challenging loan growth and a subsequent reduction in revenue streams for financial institutions. With macro-economic conditions far beyond their control, bankers can turn to carefully managing the efficiency of their
respective organizations.

Invest in automation including RPA and ITM

Prudent investments in high-return technology can offer immediate benefits in terms of bank efficiency. One such high-impact technology is
Robotic Process Automation (RPA).  RPA has recently evolved from a futuristic discussion at trade shows to a robust enabling technology; one that lowers operating expense and raises productivity.

Automating labor-intensive processes enables financial services organizations to realize time savings, leverage scarce resources, and focus on creating unique customer experiences – while eliminating redundant work and tedious tasks.

A partner in banking RPA should offer pre-bots that are pre-designed and pre-built – and developed
from common industry-driven use cases. Pre-bots offer financial institutions an immediate entry into RPA.

These ready-to-run-bots can offer a bridgehead into RPA – along with potential early success – and provide an easier avenue toward more comprehensive automation.

Another high- and immediate-impact technology progressive banks are taking advantage of is
Integrated Teller Machines (ITMs). ITMs provide an in-branch banking experience without customers ever having to leave their car. Consumers can interact with tellers via live video streaming to make deposits of cash or checks, cash checks,
make loan and credit card payments, withdraw funds, and transfer funds. Exact change is available for check cashing.

Video teller technology gives customers the ability to interact with a live video teller from a centralized location, extending the reach of a bank’s most capable client-facing staff. This can help financial institutions efficiently expand
into new, alternative markets.

Determine your strategy and then execute

Highly efficient banks identify their strategy and then execute the supporting tactics with a single-minded purpose. Smart bankers don’t try to be all things to all customers; instead, their focus is on one or two overriding objectives such as becoming a
low-cost provider, an exceptional service organization, or a leader in innovation.

Exceptional bank leaders seek outside expertise in areas that help them accelerate strategic objectives and plans. They actively network with peers in industry events and conferences, they learn from best-in-class partners, and they seek the advice of experienced
banking experts. They never stop the learning process and apply a wide range of experiences to their own plans.

Continuously improve business processes

Well-defined, repeatable business processes provide the foundation for how work gets done within a financial institution. Tasks, technology, and tools supporting a process can be redefined, or an entirely new process based on automation can be implemented.

Business Process Improvement (BPI) actions, undertaken by subject matter experts, deliver the insight required to execute more efficiently, create value for customers or enhance revenue for the institution. Or provide all three.

Tactics for growing bonds that cross over lines of business with BPI include:

• Establish cross-functional teams to participate in collaborative facilitated sessions to identify and help institute process changes
• Have leaders “walk-the-walk” by inviting peers from other business units to participate regularly in staff meetings
• Distribute regular internal communications as widely as possible within an organization
• Create centers of excellence for sharing and knowledge transfer
• Reward collaborative efforts that produce tangible results

BPI uncovers opportunities to eliminate non-value manual tasks while digitizing and removing paper from manual processes.

Align staff skills with strategy and bank needs

The culture and people of today’s banks are critical in executing an organization’s strategy and tactics. As automation replaces mundane tasks, bankers must become better relationship managers and problem solvers. Continuous training, like continuous process
improvement, is the norm for well-functioning financial institutions.

Technology partners with robust training methodologies – who are also familiar with the newest business processes – can help ensure bank’s personnel are using procedures, workflows, and technology that best meet their clients’ needs – and do so with the
greatest efficiency.

Even in uncertain economic times, savvy bankers who look to invest in automation, determine and execute a well-defined strategy, continuously improve business processes, and ensure their staff have the correct skills will develop the sturdiest framework
that characterizes the high-efficiency financial institution.