Correspondent Blog

We covered various frameworks to “wow” your customer HERE. We covered why “Time-on-Task” (or the companion Customer Effort Score) is the ultimate metric in banking HERE. In this article, the last in the series, we give you seven rules to improve your bank. While these rules were derived from improving time-on-task, they can enhance bank…

In a previous article (HERE), we discussed the concept of Funds Transfer Pricing (FTP), why systemically important banks and large regional banks incorporate FTP, and why community banks should also consider implementing FTP.  We defined an FTP framework, the regulatory recommendation for FTP, and how FTP allows community banks to make better decisions about balance…

While “customer delight” is a worthy goal, few banks should focus on the concept. We covered various methodologies HERE. Instead of trying to “Wow” your customer, in this article, we present the “time-on-task metric” (and its companion, the Customer Effort Score (CES) framework) and detail not only why it matters but why it can change…

Funds transfer pricing (FTP) has been an essential tool for financial institutions for several decades.  FTP was introduced to banks in the early 1980s to help manage interest rate risk on a transactional basis.  FTP gained further focus after the 2007 financial crisis when financial firms failed partly because of the lack of funds transfer…

Treasuries Rethink a Fed Pivot Treasury yields are higher this morning as investors rethink the probabilities of a Fed pivot anytime soon. While the UK backed off from its inflation-inducing fiscal plan, the central bank of Australia hiked rates by 25bps when 50bps was expected, and the flight-to-safety trade around Credit Suisse Bank all aided…

While we believe in “Wowing” your customers as a concept, we don’t believe in it as a strategic focus as a bank. The idea is too challenging to execute. However, we do believe that every banker should understand what “customer delight” (we will use interchangeably with “wowing”) quantitatively looks like so delight can be operationalized….

The Week Opens with Treasuries in Rally  Mode The week opens with Treasuries rallying on a combination of flight-to-safety and talk that yield highs for this cycle may be in place. Since touching 4% last Wednesday the 10yr yield has fallen to 3.68% this morning, up more than a point in price. The flight-to-safety component…

The Federal Reserve Open Market Committee (FOMC) has raised short-term interest rates by 3.00% in the six months between March and September.  The market is now forecasting an additional 1.25% in hikes by year’s end, with the next move coming on November 3rd.  Many borrowers and market participants have been surprised by the speed of…

A couple of weeks ago, we delved into the origination and operating costs of manufacturing commercial loans (HERE). In this article, we delve into deposit profitability and highlight the cost structure of deposits. The goal here is to give bankers that don’t utilize a funds transfer pricing and activity analysis methodology a glimpse into the…

The Bank of England Blinks   The UK continues to dominate the trading this week, and this morning the Bank of England said they would temporarily cease their quantitative tightening program and instead turn to temporary quantitative easing, or long bond buying, in order to “restore orderly market conditions.”   Volatility in both the currency…

Last week the Federal Reserve again raised the Fed Funds rate by another 75 basis points – and again, that was in line with the market’s expectation. The question is when will the Fed stop, and what will be the terminal Fed Funds rate? We do not believe that the Fed’s “dot plot” fully reflects…

The Fed and Their Forecasts   Now that the FOMC meeting has come and gone, and the Treasury and equity markets have resumed their selling as a consequence, let’s take a look at those forecasts and see what they might tell us.   A year ago, the Fed was declaring rates would be lower for…