ABA Banking Journal - August 2009 - (Page 14)
Community Banking Pass the Aspirin ucts continue to be a standard agenda item. The group consists of Snyder, as head of compliance and of risk management; the chief financial officer; the chief credit officer; the director of Human Resources; the head of Treasury Management; the head of Operations; and the presidents of the bank’s banking centers. Snyder chairs the committee. “This doesn’t mean that I own the risk,” she said. “It means that I orchestrate the risk.” Creation and use of this committee “has given a lot of structure to our entire process,” said Snyder. “Things are no longer as scattered.” Many details used to be addressed only after a product hit the streets, Snyder said. “Community banks are not as structured in this area, typically, as larger banks, because our regulators are not requiring us to be as structured,” said Snyder. While structure isn’t necessarily an issue, smaller banks are still expected to get the new product challenge right. and some that are rejected on the first go-round are refined, re-proposed, and passed—the process has helped the bank by building a better foundation for success. “Many of you have launched products that were failures,” said Snyder to listeners. The committee process has forced Leaders Bank employees to think things through before they bring ideas to the committee. As a result, they tend to not only have a plan in hand, but have also anticipated committee members’ questions, and devised backup plans and contingency plans in case the product or service, once launched, experiences a “hiccup.” They have learned to anticipate the committee’s question, “If such-andsuch happened, what would we do next?” Those who didn’t start out this way, adapted. “We have had people learn that when you come into a meeting unprepared,” you won’t win, said Snyder. “They have had to come back 30 days later, having had their hands slapped.” The Headache: New Media Marketing Challenge What new efforts has your bank been trying in marketing? How well are they working? Remedy 1 Suzanne McAuley, vice-president, marketing and community relations, First American Bank, $295 million-assets, Norman, Okla. With new social marketing tools available at every turn, First American Bank has decided to use an unconventional approach, at least in the banking industry, to promote our bank, our products, and our events. Twitter has been an up-andcoming resource for many retail companies to communicate more personally to their customers. We asked, “Why couldn’t banks do this as well?” As one of the early adopter banks in Oklahoma, @bankfab has seen an increase in “followers,” as well as an increase in traffic to our bank website. We have been able to promote our products and services via “tweets” on Twitter. We used giveaways as a way to attract customers into the bank. Our first rainy day “tweet” promotion was a FAB umbrella to anyone who came into any banking center and mentioned “Twitter.” A couple of weeks later, we tried our second Twitter promotion. A mention of “Twitter” would put an extra $10 into a customer’s account. Our responses increased six fold. First American Bank started utilizing the social networking site, Facebook, to attract new customers and keep in touch with our current customers. We have been able to post pictures of events that we’ve promoted through Facebook and we’ve had a great response from our customers and friends in the community. Twitter and Facebook have proven to be a new and innovative way to correspond with the people that mean the most to us—our customers. We’re very excited about utilizing these two channels to better personalize our relationships with our banking customers. ASPIRIN continued on page 16 Compliance is only one facet The purpose of the committee’s reviewing product proposals is manifold, going beyond risks and compliance issues. The ERM Committee also reviews proposals for practicality, cost-benefit efficiencies, and other filters intended to maximize return on scarce resources. “Many times we have turned down new product proposals,” said Snyder. Some of these rejects, she said, have been no more than “pie-in-the-sky” notions that won’t likely produce results. Sometimes, they are the fruit of overoptimistic thinking. “Often, it’s a business-line person looking at the idea, but not with a critical eye,” said Snyder. The ERM Committee brings that cold, hard look to proposals, from the multiple perspectives implied by its structure. One of the committee’s current requirements for presentation of an idea is a three-year projection of potential results, which forms the basis of the committee’s weighing of costs versus benefits. “It really makes people who want to launch a service think through what they want to do,” said Snyder. Even where a product is approved— 14 AUGUST 2009/ABA BANKING JOURNAL Not a lockstep effort Now that the committee has created a formal review process for new product development, a complementary informal “process” has sprung up. The bank has found that the necessity of making a formal request for approval has led the bank’s staff to work harder, up front, to sweat the details and issues of an idea earlier in the process. It isn’t unusual, said Snyder, for people developing ideas to talk out the issues that they are examining, with her, before going before the committee. Snyder addressed the concern of the need for prudence and care versus the traditional advantage of community banks of not having to put ideas and proposals through the bureaucracy of a large bank. She said that the bank had achieved a balance, in its experience. Some proposers have had an idea, and with very little lead time, managed to put together a convincing case—even a day before the committee meeting. So flexibility can co-exist with process. Another element of product development that challenges compliance and risk Subscribe at www.ababj.com
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