Calling All Salesforce and nCino Banks

For any bank using Salesforce and/or nCino as their CRM and loan origination platform, respectively, or if you are considering those platforms, we would love to exchange best practice ideas with you. We will be holding an in-person roundtable session at the upcoming S&P Global Community Bank Conference 2022 at the Four Seasons Resort and…

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Pricing Models – 4 Changes Banks Need to Make Now

Our recent sampling of 73 banks indicates that most banks have not adjusted loan or relationship pricing assumptions over the last two years. That could be a mistake as the environment has been radically different since 2020, and many banks are mispricing their commercial loans and relationships. In this article, we provide banks with four…

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What Is A Lending Curve and How To Use It

A yield curve shows interest rates associated with different contract lengths for a particular interest rate instrument.  With recent interest rate volatility, the yield curve is changing shape daily, and there is much discussion about how the shape of the yield curve predicts the future strength of the economy.  While economists may use the shape…

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Relationship Pricing is Key to Performance

Community banks pride themselves on superior customer service. Approximately 90% of all community banks believe that they provide an above-average level of customer service (of course, the math cannot work that way, as half of all banks should be providing a below-average level of customer service). Research by various consultants shows that 80% of companies…

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Payment Products – 14 Ways Banks Will Make Money

In the future, banks will make money on payment products by DELAYING settlements. That vision is ironic considering financial institutions are spending billions of dollars moving payments from one to three-day settlement to real-time. However, in the next three years, many banks will have the bulk of their payments settling in real-time, and delaying payments…

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Brand Differentiation – How One Bank Is Producing 132% Profit Growth

If your bank struggles to create a clear value proposition and brand differentiation, then we have a case study for you. In December 2021, a Brazilian bank, Nubank, went public in the U.S. and became the most valuable bank in Latin America. Their secret – fanatical customer service. This article looks at how this bank…

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How To Take Advantage of the FOMC Meeting

Last week’s FOMC Meeting resulted in an increase in short-term interest rates by 25 basis points (bps) and projected seven rate hikes in 2022 and another four hikes in 2023.  The FOMC projects the Fed Funds rate to reach 1.875% by the end of the year and 2.75% next year (see DOT plot below).  However,…

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How To Sell Prepayment Provisions In Commercial Loans

If banking had an Olympics, creating loan value would be an event. The recent Fed meeting, with its hawkish tone, makes the sport of loan value creation even more important. While many lenders are good at gathering new business, they may lack the experience to create optimal mutual value. To make it into the podium,…

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How Banks Can Compete for Loans Against Insurance Companies and CMBS

Community banks have solid competitive advantages when competing against insurance companies (primarily life insurance companies or “Lifecos”) and commercial real estate securitization conduit lenders (CMBS) for commercial borrowers. Unfortunately, some bankers are not positioning their services correctly to explain why borrowers should do business with their community bank. Some bankers even use fatalistic arguments that…

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Using The OODA Loop For Faster Bank Decision Making

The OODA Loop is a decision-making framework that we have found increasingly helpful to solve a variety of problems and give leaders a methodology for making decisions quickly. The concept was developed by Air Force Colonel John Boyd, one of the great strategists of modern times. The framework emphasizes speed and agility while looking for…

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Why Now Is The Time To Use Swap Spreads For Loan Pricing

Community banks face intense competition for profitable borrowers and relationships.  With short-term interest rates rising and long-term rates still at historically low levels, all bankers should understand how swap spreads may provide a competitive lending advantage.  In this current market, swap spreads are negative, and banks that can utilize swap spreads in pricing loans gain…

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Here Is The Money Leaving Your Bank For Crypto

Last week, JP Morgan opened banking’s first presence in the metaverse within the blockchain-based virtual world of Decentraland (go HERE for a primer). The “Onyx Lounge,” named after the Bank’s blockchain product, comes complete with a roaming tiger greeting visitors and an ironic portrait of CEO Jamie Dimon, who has been a crypto naysayer. Now,…

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