Banks are facing more challenges when it comes to reducing costs and improving efficiencies. When presented with these challenges, along with pressure to increase revenue; tough decisions must be made. A one size fits all plan does not work. Not all banks or branches run the same way; an effective cost reduction project might work for one location, but not in another.
Many CEO’s look internally for solutions; this may result in branch closures and personnel layoffs for a quick fix. However, closing branches could be disastrous for a community bank. Looking internally is the correct path, but streamlining processes and cutting costs when possible can come from other areas than just layoffs and closures. An article from the American Banking Association Banking Journal highlights areas banks should consider for reducing costs.
A main area is branch evaluation. When a bank is evaluating their branches, they should look at the branch’s contribution and growth potential. Shifting or reducing hours should be considered before closures and layoffs. Other ideas are to set sales goals for your people to work towards, and train the staff to evolve with the bank. A key point is to invest in marketing for the underperforming branches and see how the staff can turn the branch around. Human resources costs should be assessed. What are the incentive and compensation packages? Are they aligned, or are they counterproductive, encouraging employees to sell products to customers who will not use them?
Finally, a bank should examine their vendor expenses. How many vendors are they currently using? How many invoices are they paying per month? How many employees per branch are placing orders? Are employees running out during working hours to buy supplies? These issues need to be addressed. There shouldn’t be more than one person per branch ordering supplies and employees should not be running around town to restock.
Here at Optimum, we consider ourselves a one source resource for banking needs. Our ordering site supports this concept. We stock everything for you from printed items to supplies, manage your inventory, deliver to your location, and send you one invoice for everything; how easy is that?
Managing savings and efficiencies is not an easy task. Consider these tips before making drastic changes and remember the little things add up.
By: Brittany Taylor, Marketing Team Leader Optimum System Products.