Independent Banker - August 2021 - 24

PORTFOLIO INNOVATION STATION
of what innovation brings to a bank
is improvement in performance
and profi tability.
3 ways to boost profits
by innovating
By Charles Potts, ICBA
rofi tability and performance have
always been a major focus for
community bankers. And in the wake
of COVID-19, new sources of income
are becoming critically important.
Several factors contribute to a bank's
profi tability-such as the quality of
core deposits and the right balance of
loans to overall assets-but one often
overlooked factor is the connection
between innovation and profi tability.
To that end, consider these three
areas when looking for ways to
increase innovation and improve
profi tability at your community bank.
1. Ease employee turnover
With U.S. job openings at an all-time
high and many organizations shortstaff
ed due to the pandemic, it's more
critical than ever to reduce employee
turnover. Today's workers are looking
for innovative cultures that provide
them with opportunities to contribute
P
to the overall direction and strategy of
the bank.
A community bank's employees are
often best suited to identify critical
areas of improvement, resulting
in more effi cient, cost-eff ective
and profi table bank operations. By
cultivating an innovative culture,
the contributions of longer-tenured
employees will continue to grow,
which, by extension, results in
reduced turnover, improved
operations and increased profi tability.
2. Embrace innovative technology
There are numerous solutions and
services available to community
bankers to increase effi ciencies.
Instead of raising your headcount,
consider instead whether a new
technology solution could provide
incremental improvement in the
overall effi ciency and eff ectiveness of
bank operations. A natural extension
3. Stay competitive
Sometimes, the key to profi tability
is making sure you're providing
the right products, services and
solutions to your market at the right
time. A thoughtful, forward-looking
culture naturally fosters new ideas
and solutions that work. Continuous
innovation tends to support short- and
long-term profi tability, because the
bank won't experience the detrimental
peaks and valleys that come with
signifi cant upheavals or conversions.
The fast-fail methodology,
popularized in Eric Ries' book The
Lean Start-Up, is also something
to consider. By iterating and testing
faster, community banks are better
able to jettison bad ideas sooner.
Coupling an innovative culture with
innovative processes that mimic
the fast-fail methodology can help
accelerate the cycle of innovation and
more quickly meet your business goals
and objectives.
ICBA remains committed to
bringing meaningful innovation to
community banks through its vast
network of resources, including
the ThinkTECH Accelerator, which
provides opportunities to interact with
vetted fi ntech providers and other
bankers. Most recently, ICBA launched
a series of educational initiatives
through Community Banker University
in partnership with The Venture
Center. We invite you to check out
these and other resources at
icba.org/education 
Charles Potts (charles.potts@icba.org)
is ICBA's senior vice president and
chief innovation off icer
24 Q ICBA Independent Banker Q August 2021
http://www.icba.org/education
Independent Banker - August 2021

Table of Contents for the Digital Edition of Independent Banker - August 2021
