Ideas You Can Bank On

by Mark Faircloth

Two trends I see in the financial services industry today include, on the retail side, a shift in servicing to online and other non-branch options, and on the commercial front, a focus on credit quality and the impact of each relationship on overall portfolio performance. Put these two observations together and we are having fewer quality encounters with our customers, and when we do, they are often not broad enough. The solution is to construct better planned conversations.

To make your planning more effective, first, be proactive. In a branch setting, hoping for an extra few minutes at the end of a product purchase to go a little further or push the bank’s “tag on” product of the day is both haphazard and disrespectful of the customer’s time. The same logic applies in an outside call situation. Instead, contact your customers proactively and set up a time to discuss their overall situation.

Second, bring the customer along. Let him or her know the purpose of your questions. A positioning statement like, “In order to get a better idea of how we can serve you, I would like to get your thoughts about your current financial situation and anticipated needs,” helps the other person know where you are going. The more your customers know, the more they will participate.

Third, be topical. Random questions create confusion and distrust. As you plan your conversations, think about a logical progression of questions. For example, in retail banking, a relationship review conversation could cover these areas:

• Current service satisfaction level
• Current money management, including day to day banking, savings, investments, and borrowing
• Anticipated life and lifestyle events, such as a need for a new car or the postponement of retirement
• Resulting financial needs, such as a car loan or restructuring of a 401k plan
• Role that the bank can play in these decisions

Similarly, in the commercial arena, you could cover these areas:

• Current success level of the business
• Challenges and opportunities over the next 6-18 months (both for the company and the industry)
• Resulting plans to meet these challenges and opportunities
• Financial implications of the company plans
• The role that the bank can play in implementing these specific plans

Many financial organizations tout the role of “trusted financial advisors.” To truly earn that title, we need to establish that trust through better planned, truly two-way conversations, and offer real advice versus merely selling what’s available today.

To learn more visit: http://www.omega-performance.com

by Connie Hritz

Many organizations find themselves in a training dilemma. They realize the significant benefits of training but need to minimize the costs—both out of pocket and opportunity—associated with training. There is a need for risk management skills, sales skills, product knowledge, and services skills. So how can organizations provide the benefits of synchronous, skills-based learning without the expense of travel, lodging, and all of the costs that classroom training entails?

One successful solution that is gaining popularity is virtual instructor lead training, or VILT. In VILT, participants join these virtual classrooms right from their desktops or laptops through web- and audio-conferencing services. The “virtual” facilitator then guides participants through the session, pausing for breaks as appropriate and even breaking the larger group into smaller, separate work groups before bringing everyone back together again. If done correctly, these sessions can be as interactive and engaging as classroom sessions, enabling participants to talk, write, discuss and exchange ideas, and practice new skills.

Employing VILT in your own organization can ensure that your employees:

• Receive training in a highly interactive way that translates back on the job
• Learn from their co-workers and peers
• Keep their skills honed while keeping costs down
• Improve both knowledge and skills because of a diversity of online functions

Participating in VILT is as close to attending a class as possible, without having to be there in person.

Learn more at: www.omega-performance.com

by Cindi Campana

When effective coaching is applied to the process of analysis and decision making in a credit request, there is much to be gained by everyone involved. Consistent, planned coaching increases the skill level of new lenders much faster than experience alone. Consistent coaching fosters consistent processes—which, in turn, are essential for quality. This is obviously important to the success of your department as well as your organization.

Successful credit coaches follow six steps to success:

1. Guide the initial orientation. The framework and direction that you give in the beginning of a lender’s career creates a point of view and business orientation that will influence performance from then on.
2. Provide lenders with the knowledge and skills needed to be successful. Providing the right training at the right time motivates performance. However, when people are sent to training for skills they clearly possess, they feel unmotivated and discounted. This is where an assessment can be very helpful to identify training gaps and needs.
3. Understand that knowledge and skills gained in training don’t always transfer to the job. For training to transfer, it must have value in the workplace and contribute directly to “real work.” That’s why it is so important for managers to reinforce new knowledge and skills by helping the lender see how these apply to their work.
4. Hold lenders accountable for applying knowledge and skills appropriately for an assigned responsibility. Do this through a series of coaching sessions for 6-9 months in order to confirm the work a lender is doing matches the quality standards expected. At the end of this time, you should have a mature lender whom you can trust to consistently make sound credit decisions.
5. Involve the lender in the orientation of new lenders when proficiency, judgment, and maturity signal readiness.
6. Provide ongoing coaching to reinforce and recognize skills and contributions.

The first four steps of this sequence lay the foundation for a successful career. The final two steps—5 and 6—recognize and motivate competent lenders and encourage them to continue their professional development. Any step that’s skipped creates a potentially recurring problem that you will have to manage in the future.

Learn More at: http://www.omega-performance.com/solutions/leadership-coaching.asp

by Cindi Campana

Lately, we’ve been hearing that employee product knowledge levels—or lack thereof—is a real concern with many banks. When asked to assess the current level of their employees’ product knowledge in the saving/investing money and borrowing money categories, executives tell us the average score is below 50 percent.

What’s the impact of scores this low? It means:

1. Bankers are not able to answer customers’ questions
2. Bankers are giving incorrect answers to customers’ questions
3. Bankers do not ask questions and are missing opportunities

Bottom line—this all contributes to a negative customer experience, adds little value for the customer, and fails to deepen the customer relationship.

The best bankers are able to assess accurately each customer’s financial situation and provide the appropriate products to match the needs. This is especially true today as organizations are trying to capture more share of wallet.

So how can organizations prepare bankers to be knowledge experts on products and services? Organizations should employ product mastery techniques (and there are several highly effective ones) to build skills and equip bankers so they have second-nature recall of products and services. Bankers who are able to speak with ease and confidence about the different products and services in a very effective manner can provide a memorable customer experience for their customers—and uncover additional sales opportunities.

Learn More at: www.omega-performance.com

by Joe Sparacino

The branch manager is the key to the small business market. Unfortunately, many branch managers and other small business contact personnel lack the knowledge, skills, and confidence they need to demonstrate their and their organization’s value to the small businesses owner and to earn the right to obtain their business. How can you ensure that the branch managers in your organization are positioned to be the small business owner’s best partner?

Start off by making certain that your branch managers have the business acumen they need about the drivers of small business success. Understanding a small business’s typical cash conversion cycle is a good place to start. Unless they are being expected to underwrite loans, branch managers do not necessarily need formal, deep credit training. In fact, unless they will use it on the job and in short-order, it most likely would be a waste of your training dollars.

Instead, branch managers need the “just-in-time/just-enough” business acumen, knowledge, and skills to confidently engage not in a “Q&A interrogation” by going down a check list or questionnaire, but in an intelligent, reciprocal dialogue from common perspectives on business drivers wherein the branch manager and the small business owner are partners in each other’s performance. In other words, that trusted advisor relationship that everyone is searching for but only a few have managed to accomplish.

Lastly, open up and better enable the communication process between your underwriters and the branch managers so that the branch managers have and understand the information they need to communicate to small business owners in a more collaborative manner. Your small business customers will appreciate it!

By equipping your branch managers right now with the skills necessary to more effectively engage small business owners in a confident, credible manner, you will enable your bankers to develop more, deeper, and more profitable relationships with the small businesses in their area That will ultimately have a very positive impact on the small businesses themselves as well as your organization.

Learn More at:  www.omega-performance.com

by Connie Hritz

A great deal of evidence supports the effectiveness of coaching, yet few leaders and managers dedicate themselves to this task. We know that productivity increases when coaching accompanies training. Accordingly, the coaching of coaches is a key productivity lever for attaining strategic goals.

Yet some coaching implementations fail to drive results. In our experience, there are three main reasons why this is so. First, there is little accountability or support for enhancing the quality and frequency of coaching. Second, action plans are not specific or are of poor quality. Third, there is little connection between coaching and strategy. Managers go through the motions of coaching, but miss a huge opportunity to focus that time on strategic issues that drive results and speed to performance

The best way to guarantee that frontline coaches coach regularly and well is for you to coach them to do so. When coaching of coaches does not occur in organizations, results are not realized. At best, they are inconsistent and unpredictable. Therefore, one of your responsibilities as a leader at your level is to ensure that the coaches who report to you are bringing out the best in their people, and connect their coaching to the organization’s strategy.

How often should you coach? We believe that you should:

• Hold at least one pre-coaching conversation each quarter
• Audit sample action plans at least quarterly
• Hold at least one formal coach-the-coach session per quarter

In addition, you should increase the frequency of your strategies when:

• The coach is new
• The coach is coaching at a level that is too easy or too hard on employees
• The organization has a significant number of new employees
• You are managing critical change

If these things are missing, you will not get the business results you want. You need to hold coaches accountable and ensure they create coaching conversations and action plans that drive behavioral change.

Lear More at: http://www.omega-performance.com/solutions/leadership.asp

by Jan Abrams

There may be a silver lining to the current recession—some forecasters say that we are poised for an increase in consumer lending over the next few quarters, and that the increase will come from customers who are better qualified than in the past. A new rationality is coming from both sides of the desk—consumers have learned as many valuable lessons about credit as their lenders have.

While many lenders have tightened their credit qualifications, and some have taken a breather from making consumer loans at all, consumers have also been reassessing their situations and thinking long and hard about whether taking on more credit is a good idea.

As a result, customers are nearly as cautious as lenders and they’ll be shopping for a lender they can trust. Will your organization be poised to earn that trust and take its share of these customers? That may depend on a combination of your marketing message and the skills of your front-line employees—the tellers who recognize needs and refer customers and the personal bankers who help customers find the right product to fit their needs.

What Omega sees now is the beginning of an increase in consumer confidence and revived interest in consumer loan originations. This revival is being led by lenders that have taken a fresh, consultative approach to their customers. Our clients tell us that the key is to build trust with potential borrowers who have become leery of banks. Instead of viewing every opportunity as a chance to make a commission, lenders who want to earn the customer’s trust need to use a fresh approach that treats each potential borrower as a partner in the loan.

This provides an opportunity to consult on the best approach to meeting borrowers’ needs, and includes keeping borrowers’ overall financial pictures, including future needs, in mind. The objective is to help customers meet both short-term and long-term goals through judicious plans that include borrowing, managing debt, making the most of cash flow, and investing for the future.

Learn More at: http://www.omega-performance.com/solutions/credit-consumer.asp

by Cindi Campana

The greatest demographic shift in U.S. history is now creating the greatest banking opportunity of the 21st century. With double-digit growth in the Hispanic population projected to occur over the next seven decades—and wealth accumulating twice as fast as in the general U.S. population—the chance to capture market share and increase deposits has never been more favorable.

So…how are financial organizations preparing to take advantage of this opportunity?

Most financial organizations simply don’t teach bankers how to effectively engage and sell to their Hispanic customers. As a result, many financial service professionals lack the experience and cultural perspective to confidently build relationships and close sales with their Hispanic prospects.

To maximize this market opportunity and increase full-service customer accounts, bankers have to adapt their selling practices to accommodate Hispanic cultural priorities and preferences. They must learn how to:

• Identify influences on Latino buying decisions—including acculturation, habits of heritage, centers of influence, and drivers
• Communicate the value of the organization’s products and services, and connect them to Hispanic cultural values
• Develop strategies for overcoming common cultural challenges
• Recognize buying habits and adapt to consumer tendencies
• Leverage life events and broad customer referral networks to uncover multiple selling opportunities

The Hispanic market in the U.S. is large and growing. If you want to increase your organization’s share of that market, your bankers must learn to be far more persuasive and effective when selling to Latino consumers.

Learn More at http://www.omega-performance.com/solutions/sales-service.asp

by Cindi Campana

It’s Monday morning . . . how many of you will be successful this week? Do you have a written plan from a previous coaching session on what you need to do and by when to meet your goals this week? In other words, do you have an Action Plan that will guide your focus on efforts in certain initiatives?

Sometimes we take action planning lightly. However, we cannot emphasize enough how important action planning is as a key component to an individual’s development. The reason action plans are so useful is because they outline what is needed to achieve business objectives. Results occur when the link between the organization’s vision and the concrete action plan is made.

With that said, the action planning process should be an integral part of coaching sessions and not an add-on. Without action plans, coaching sessions become nice chats. Keep in mind that we are not referring to performance improvement plans. You should use coaching with actions plans as an ongoing best practice with all of your employees. Remember that setting goals with employees is not the main achievement—it’s deciding how to achieve your goal by developing an action plan for every employee and then executing it.

In order to make action plans effective and integral to the process, outline activities and skills. This allows employees to focus on objectives and move forward. Then allow employees to self-discover in order to foster a collaborative session. Following these steps will take a plan from the nebulous to the concrete. It will also make employees accountable, which in turn improves performance.

Once coaching with effective action planning regularly occurs at every level, you can expect to see the following results:

• Focus on the right objectives
• Progress tracked
• Increase in the probability of employee success

And, most importantly, satisfied and motivated employees.

Visit http://www.omega-performance.com/solutions/leadership.asp to learn more!

by Jan Abrams

Microlending came to the forefront of the world stage in 2006, when Muhammad Yunus shared the Nobel Peace Prize with the microlending organization he founded in Bangladesh, Grameen Bank. That company alone has lent money to more than 7.6 million people around the world.

Microlending may start small, but it is big business now: worldwide, it is among the fastest-growing lending segments. In the U.S. microlending has been alive and well since 1986, when then-governor Bill Clinton invited Mr. Yunus to introduce Arkansas banks to the concept; the result was the Southern Good Faith Fund, a division of Southern Bancorp designed to assist low-income residents in starting a business, going to college, or buying a house.

Not only is microlending a growing business, it’s a profitable one. For most microlenders, nonperforming loans amount to less than 1 percent of total loans. And according to research by Deutsche Bank, the global demand for microfinance loans is about $250 billion, or about 10 times the amount that has already been lent.

The microlenders that create the greatest economic success among their customers are generally those that create borrower/lender communities, in which borrowers meet weekly to discuss their businesses and make a small payment on their loans. In some communities, if one member cannot make a payment, the rest of the group must make up the difference—creating peer pressure to stay current. In the U.S., the Small Business Administration’s microloan program provides pre-loan training for budding new business ventures and offers the services of mentors—retired businesspeople who can help small enterprises succeed. Non-financial businesses are getting into the microlending business as well—eBay has a microlending site, MicroPlace.org, and Whole Foods Market’s Whole Planet Foundation collected more than $1 million in donations from shoppers to use in the microlending programs it supports. Kiva.org provides a method of connecting individual lenders and borrowers for loans as small as $25.

Microlending is yet another way that your organization can meet the needs of the huge unbanked and underbanked population. Are you microlending yet?

Learn more at: http://www.omega-performance.com/solutions/credit.asp