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Answering the Question: What Keeps Community Bank Executives Awake at Night?

by Simon Goble on July 6, 2015

What are the key questions that weigh heavy on the mind of community bank executives?

Here are three questions posed by CenterState Bank for their Bank management Conference:

  1. What impact do current economic conditions and forecasts have on my Bank’s business strategy?
  2. Are my Bank’s loan and deposit products structured to meet the needs of my desired client base, while achieving the profitability and growth expectations of my Board and shareholders?
  3. Is my Bank capitalizing on the advances in technology occurring within our industry?

The Impact of Economic Conditions on Your Business Strategy

According to Al Forrester of Ficast Data, a leading U.S. provider of decision support and board reporting systems, to have a hope of answering the first question community bank executives need to be empowered to model how these economic conditions and forecasts will affect their bank based upon their understanding of their assets, liabilities and customer behaviour.

This modelling will allow them to test numerous possible events. Some events will be more likely to occur than others and as such financial assumptions should be made and modelled to create different scenarios.

Download the introductory guide to risk and financial performance

However, it is important to remember that assumptions however well derived, are not facts and so their absolute integrity can never be assumed. In order to model scenarios effectively, each bank must have a strong risk management framework in place.

Loan and Deposit Product Structures

“Bringing financial planning and risk together”

In answering the second question; being able to accurately assess the impact of a given event or series of events means that a bank can plan its strategy and turn risk management into an informer of profitability. In order to do this effectively, banks must bring financial planning and risk together.

By bringing finance and risk together banks can strategically model the profitability of the loans and deposits on the balance sheet for years into the future whilst assessing the impact on bank performance ratios and the three main financial risk areas; credit risk, liquidity risk and interest rate risk.

Capitalizing on Technology

To answer the third question bank executives should talk to technology providers, ask them questions, and let them answer your questions.

Ask technology providers about their vision for the future. Ask them how their plans to leverage industry-leading technologies such as cloud-based software-as-a-service and banking BI applications can help you achieve your goals and overcome some of your biggest challenges.


“Risk weighs heavily on the minds of senior banking executives. But that load can be lightened when top-notch enterprise risk management is harnessed to enhance strategic planning capability”

In conclusion, we believe that the financial crisis of 2008 has changed the banking landscape forever. Regulation now requires that risk management, once a basement activity, be a boardroom level concern.

There is a new role for risk management and capital adequacy linked to banking strategy that needs to be explored. Risk can be shifted from onerous burden to strategic advantage. In bringing finance and risk together executives can begin to answer the questions that are keeping them awake at night.

To learn more about how Ficast Data and BankBI are bringing finance and risk together, talk to us at the CenterState Bank - Bank Management Conference and download the first in a series of articles that explores this topic by Al Forrester.

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