This is a purposefully vague and generalized question, and in theory, it should generate a wide spectrum of answers. That is always my intent when I ask it to bankers. I genuinely want to hear how things are going, and I want that conversation to be about whatever they deem to be most important. What’s interesting to me, is that the answer is almost always about loan growth. In fact, it is common enough that you could make (a very dangerous) drinking game out of it at your next conference.
“Well, loans are really tough (drink), and you won’t believe what Bank XYZ is doing.”
“Great! Loans were up 10% this quarter (drink/pass out) and the pipeline looks good.”
It’s clear that you understand that loan growth is the driving factor in your near term success. I encourage you to ask a great question that I recently heard from Carl Ryden.
Do your lenders have better tools for managing their fantasy football teams than they do for managing their loan portfolios?
In many cases, the answer to that question is a wince. Most banks are still arming their lenders with the exact same tools I was given over a decade ago: a phone and a legal pad. In other words, we know that these lenders are responsible for generating the most profitable new business in the bank, and yet we give them the same tools that were used in the earliest fantasy football leagues.
Compare that to the tools most of your lenders are using every fall to play a pretend football game. They log into million-dollar websites that manage the draft, provide in-depth analysis, graph recent trends for dozens of metrics, and even provide meaningful statistical projections.
Even novice players can use the clean, simple interface and wealth of data to play what was once an overly complex game. Not sure if you should make a trade? The site will show you projections for each potential lineup for the rest of the season, allowing you to quickly evaluate the pros and cons of the deal.
Banks are faced with the daily challenge of balancing compressing net interest margins with an ever growing overhead burden. However, don’t let the drive to reduce expenses keep you from investing in tools that will help your lenders grow the most important piece of your business.
Your lenders are looking for an easy to read dashboard that manages their pipeline and deal flow, illuminates recent trends, and shows forecasted performance. Sound familiar? Most important, they are looking for tools that will show them the pros and cons of a loan, allowing them to easily find ways to win the right deals in the right way.
Loan growth is tough to come by, and there are millions of dollars at stake instead of just the $50 league dues. Make sure you aren’t handicapping your team by sending them out ill equipped to compete. The legal pads just won’t cut it anymore.