Saturday, February 26, 2011

Bank Marketers Should Focus on Metrics That Matter

Early in my career, heading a bank marketing department, I remember the frustration of my department being viewed as a cost center as opposed to a revenue contributor. Part of the problem was that it was easy to see the marketing spend each month as part of the bank's expense reports. I also didn't have the measurement tools at my disposal to provide analysis in many cases.

Jump forward two decades and the tools for marketing measurement are plentiful, but the challenges for measurement have also increased exponentially. In many cases, however, it is not so much the ability to measure as it is that most bankers are not speaking the same language that the CEO and CFO want to hear.

At a time when legislation has dramatically impacted the bottom lines of most banks, CEOs and CFOs are interested in metrics that frame marketing investment and results in terms like revenue, profitability and growth. And more often than not, they want results in terms of incremental improvement over business as usual.

Monday, February 21, 2011

Minimizing the Impact of 'Unintended Consequences'

At the BAI Retail Delivery Conference in Boston in November of 2009, the overriding theme from major bank leaders, industry pundits and vendor partners to the financial services industry was the risk of 'unintended consequences' as a result of the yet to be implemented Reg E. There was the belief that, while the government was trying to protect people from excessive fees from overdrafts, there would be many consumers who would be negatively impacted as debit card transactions or ATM withdrawals were rejected. Based on a recent straw poll of many of the bankers I work with across the country, some of the same people the regulation was intended to 'protect' have been negatively impacted the most.

It has been almost 9 months since the implementation of Reg E, and the government has again created legislation that will have unintended consequences for a majority of bank customers. The still debated, but most likely to be implemented, Durbin Amendment to the Dodd-Frank banking bill will significantly lower the interchange income that banks can earn from debit transactions. In fact, many believe the impact could cause a reduction of 60-80% or more to this important non-interest income source.