Happy New Year! I hope that you had a terrific holiday season and that 2019 brings you success and prosperity, both personally and professionally. Please enjoy our first edition of New Coordinates for 2019. In this issue, my colleagues touch on a number of the challenges and opportunities that financial services companies face today.

During the fourth quarter, I spent some time talking with retail banking leaders across the country. They are wearing a lot of hats these days, with responsibilities ranging from traditional branch networks, wealth management, and brokerage to student lending, residential mortgages, business banking, small business banking, call center operations, product management, marketing, and risk management. The scope of responsibilities varies by institution, of course. But one thing is certain: Today’s retail leaders are expected to be knowledgeable on a broad set of business lines and functions. And their actions are closely watched by a myriad of regulatory agencies and independent directors. It is no easy task.

So, what’s on the minds of retail banking leaders? Below is a quick inventory of what I heard. Reflecting bankers’ increasingly diverse and complex reality, it is a kaleidoscopic mix of key questions, looming challenges, perceived opportunities, and facts on the ground, such as:

  • What to do about those branches
    • Consolidations continue, but some institutions are actually in build mode again.
    • Maximizing value from these physical facilities remains a challenge and an opportunity.
  • Which investments are being evaluated and committed
    • Technology
    • Human capital
    • Strategic partnerships
    • Artificial intelligence and big data
  • Evolving customer experience
    • When, where, and how do customers want to interact?
    • The shift to digital and chatbots continues.
  • Target customer segments
    • Better to specialize or be relevant across all segments?
  • Value proposition
    • Fast, easy, simple, friendly, proactive, helpful, and secure?
    • Digitally driven ease?
    • Does our bank have a clear proposition with proof points to back the vision?
  • Product innovation
    • Are there any hidden opportunities left for transacting, saving, and borrowing offerings for customers?
  • Payments
    • Traditional check writing continues to decline at a rate similar to the drop in teller transactions.
    • Some institutions are now offering “demand deposit accounts” that do not allow for traditional check writing as a feature.
    • Being the primary facilitator for payments remains the cornerstone of a customer relationship.
  • Building customer loyalty
    • There are so many alternatives for customers.
    • This area remains a challenge.
  • The rising interest rate environment
    • Now is the time to really watch the yield curve and manage deposit pricing.
    • Net interest margin focus continues.
  • Small business lending, investment, and mortgages
    • Does our institution serve all these needs?
    • Do we outsource any of these services?
    • How much mortgage origination opportunity exists right now?
    • Are investment offerings simply a sticky relationship service, or can they provide a meaningful contribution to earnings for banks?
    • What levers do we have for mortgage differentiation? Will our Asset-Liability Committee (ALCO) support using our balance sheet and holding mortgage paper?
  • M&A
    • What’s the appetite for acquisitions and consolidation?
    • Do we dare consider a branch acquisition versus whole bank acquisition? It’s not easy.
  • Skill sets
    • How do we motivate and develop bankers in a rapidly changing business model?
    • What skills are necessary, and how do we best deliver training?
  • Goals and compensation approaches
    • It is still appropriate to have a sales culture, goals, and objectives.
    • The approach must be balanced with true customer needs.
    • Needs-based selling will always be in fashion.
  • First-line-of-defense risk management
    • Are we balancing risk and customer experience appropriately?
    • Compliance groups were reorganized in 2018 in many institutions.
    • Do we have role clarity settled for 2019?
  • Credit policy
    • Stay the course or modify, given the economic outlook?
  • Branding and marketing
    • Is it time to rebrand, or is 2019 a year of continuity in messaging?
  • New customer acquisition
    • The cost to acquire continues to rise.
    • Are we pacing the market or lagging?
    • How is our deposit share holding up in our key markets?
  • Customer satisfaction and complaints
    • Do we have our arms around the key issues?
    • Do we resolve issues in a timely fashion?

As I took notes during these conversations, I was reminded that “Retail is detail.” I had a wise mentor who used that phrase constantly, and it still holds true today. There are a million things to pay attention to in retail banking. While none are individually “complex,” the real complexity lies in the sheer volume of things to manage.

I have tremendous admiration for today’s retail leaders, who are also change agents for their banks. All other divisions of their respective companies depend on a high-performing retail organization.


B. Scott Fisher

Scott Fisher, Chief Client Officer of Treliant, is a senior financial services executive with a 32-year career in banking, including responsibility for mortgage, retail banking, consumer credit, product management, brokerage, private banking, commercial banking, network planning, e-commerce, call centers, and operations. He has overseen large-scale mortgage originations, fulfillment, and servicing…