Performance – always paramount in the financial industry – is more critical than ever now. Even before COVID-19, financial institutions faced a challenging regulatory environment, rising consumer expectations and declining branch counts. The pandemic has added further rate drops, a run on small business loans, and increased consumer angst to the mix. Today’s CFOs need more than just new tools to navigate the current situation; they need a whole new approach to performance.
What Is Performance Banking?
Performance banking is based on performance management’s model but applied to banking. The same tenets of optimism, opportunity, leveraging data and reframing the challenge is solid advice at any time, but it can be transformative during these unprecedented times.
5 Beliefs of Performance-Focused Banks
Performance-based banks come in all sizes and all share some common beliefs.
1. Performance begins with culture
As leaders, you must build an environment that encourages a growth mindset. One of the hallmarks of a performance banking culture is a willingness to embrace new ideas in an industry that has been known for relying on traditional approaches. You must refuse to settle for mediocrity. A growth-focused mentality won’t develop in your institution without conscious, dedicated effort.
2. Performance isn’t an accident. It’s earned
Intentional actions bring results; proactively plan for success. Specific, measurable outcomes are something to build into each day, especially during times of flux, recession, rising interest rates and other realities that affect a bank’s performance in times like this. If you want your institution to grow faster than the industry, it’s time to make intentional decisions to get there.
3. High performance requires an informed workforce
Everyone in the organization, from the board room to the teller line, directly impacts performance. In some banks, the C-suite believes lower-level employees don’t understand key performance indicators, and maybe that’s true to a degree. But every employee in the bank needs to understand how they can make a difference. Just as important, they need to understand how vital they are individually in the shared goal of boosting performance.
4. The market rewards the agile institution
Banks that make better, faster decisions outperform the market. If your data is old, and if there’s a lack of transparency, too much time and energy is spent crunching numbers for a “stale” view of the situation. Instead, source fresh data, quickly analyze trends, make rapid decisions and adjust your plan frequently. Performance banking software like Banker’s Dashboard can help you get there.
5. Data serves people (not vice versa)
Let technology do the heavy lifting, aggregating and visualizing data for better analysis and decision-making. In the world of Excel spreadsheets, it’s easy to become a slave to the document. Empower your staff to stop being “spreadsheet wranglers” and use technology to not only aggregate your data but put it into a more actionable format that will empower decision-making.
In order to not just survive but thrive in these economic headwinds, it's vital to reorient yourself around performance banking. Keeping your eyes on the prize during difficult times, empowering your staff, fully leveraging data and quickly pivoting when necessary can help make you a better CFO and your bank a more vibrant and successful institution.
For practical, actionable strategies to help you lean into the future of banking, download our new white paper, Banking in 2021: The Focus on Efficiency.