Job Description: EVP of Distribution and Service Excellence

Figures don't lie. Financial Institution (FI) customers interface with us online far more frequently than in person. Has our organizational structure evolved to meet this challenge? I think not.

This post is geared toward drafting a job description of an FI EVP of Distribution and Service Excellence. Flowery name, I know. I also look at names such as Chief Experience Officer with extreme skepticism. But this position is different. And it's not my idea. I first wrote of such a position based on an idea posed by a student in my class at the North Carolina School of Banking.  I envision the person occupying this role to be a savvy marketer with strong IT skills, as well as senior leadership abilities. Here is my job description for such a position. 

EVP of Distribution and Service Excellence

Summary of Responsibilities: Member of Senior Management... As a member of senior management, this person participates in setting and executing the FIs strategy. Ensure compliance with all industry laws and regulations. Assist the Board in setting organizational policy and develop procedures to follow policy. Run the FI in a safe and sound manner. Participate in community events and represent the FI within the community. Join one community organization consistent with FI strategy and employee interests/values and be active in the organization's leadership. Participate in trade association(s) and assume a leadership position in at least one industry trade association.

Marketing and Product Development... Direct supervision of the Marketing and Product Development department. The department's responsibilities are to collaborate with business line leadership in developing tactics to deepen existing relationships and win new relationships with customers consistent with strategy. Develop and support a brand that is consistent with strategy, including traditional and non-traditional advertising, social media, and service excellence criteria. Develop products and product packages consistent with customer wants and needs and FI strategy.

Information Technology (IT)... Direct supervision of the IT department. The department's responsibilities are to implement and manage a stable core processing system and ancillary systems. Maintain system security. Evaluate existing and prospective systems that are consistent with strategy and safe and sound operations. Implement selected systems. Manage technology driven distribution such as online banking, mobile banking, automated teller machines (ATMs), automated teller stations, ACH, or other distribution systems that evolve. Manage relationships with technology vendors. Collaborate with other departments to ensure competitive technology driven distribution channels.

Human Resources (HR)... Direct supervision of the Human Resources department. Develop compensation, incentive, and benefits programs to attract and retain high quality employees with the greatest potential to successfully execute the FIs strategy. Ensure compliance with all HR related laws and regulations. Establish employee review program that encourages positive performance, professional growth and expertise, and remediation for low performing employees. Assist supervisors to positively influence employees, recognize superior performance, remediate poor performance, and remove employees with little chance to add to organizational growth. 

Training... Direct supervision of the Training department. Collaborate with department supervisors to develop development plans by position that focuses on skills consistent with the FIs strategy, technical, and compliance training. Develop leadership and supervision training so supervisors have the skills to motivate employees, identify high performing employees, coaching, and improve overall team performance. Manage the training aspect of FIs Succession and Executive Development plan. Be the champion to expose high performing employees to different disciplines within the FI. Ensure compliance training is consistent with industry standards.

Other duties as assigned.

Is it time to elevate technology from the current bits and bytes mentality, which in my opinion is why IT ends up reporting to an operations officer?

~ Jeff

Community Involvement: Good investment or waste of time?

A bank CEO at a strategic planning retreat opined: it is far more productive to implement a disciplined calling effort than to attend community events. Yet community involvement continues to be cited by community financial institutions as something that distinguishes them from large banks.

Who is right? In its most basic form such as deciding whether to attend a local Rotary Club event or to spend those two hours calling on clients and prospects, I would agree with the bank CEO. It would yield far more results doing the latter. Community involvement by financial institutions should not be considered an end in itself. It should be considered a means to an end… to build relationships that generate business.

Let’s drill down to specifics. A bank’s market manager attends four monthly Rotary dinner meetings. Let’s call her Cindy. She meets numerous people at the meetings, but it takes four times together before she thinks there is a strong enough relationship to call on her newfound acquaintances. Each dinner cost $100 for Cindy to attend.

As a result of her participation in Rotary, she calls on eight contacts. Four agree to meet with her, and one decides to do business with her bank. The new client owns a small business that requires a line of credit and a business checking account. The line of credit turns out to be essentially a home equity line of credit.

According to my employer’s 3Q09 profitability peer database, the average balance of a business checking account is $25,193. The coterminous spread is 2.44% of the balance, and fees represent 0.80%. Therefore, the checking account generates $816.25 in annual revenue for the bank (see link below to my employer’s website for profitability reporting services).

Home equity lines of credit have an average balance of $71,340 and a coterminous spread of 3.05%. This generates annual revenue of $2,175.87. Therefore, if this new customer brought the above mentioned average balances, the bank would generate $2,992.12 in annual revenue. Recall the cost of those four Rotary meetings was $400.

My marketing-type friends would jump all over this, citing an incredible ROI. This gets to a common yet energetic discussion between bank marketing and finance people. Finance wants to cover the cost of Cindy, her branch, and all those back-office folks supporting the branch. Marketing wants to focus on the marginal cost, the $400 in dinner fees. But I digress. This discussion will have to wait for another day.

The point that should not get lost is the primary purpose Cindy gets involved in the community is to get to know people that she can later call on for business. So often bankers execute on the former, but don’t follow through on the latter.

A personal example is the case of two Northwestern Mutual Insurance agents. One agent I met in business school. A few years after graduation, he called on me to discuss his company, his specialties, and to gauge if there was potential for him and me to do business together. Another agent, unrelated to the first, received my name via a referral from a mutual acquaintance. He also called on me to introduce himself and the company. As I mentioned in previous posts, my former bank never called on me in the fourteen years that I banked there. In the fifteen years living where I live, only one other bank called on me and asked for my business.

I’m not saying I should be the focus of business development efforts by local bankers. But the fact that I have been an active member of my community for an extended period of time with little in the form of proactive contact by local bankers makes me believe that others are receiving similar neglect.

Community involvement by banks was not designed to make us feel good about ourselves; although this is certainly a benefit. Community involvement supposed to initiate relationships that have the potential to become profitable business for banks. If community banks are to succeed, we must focus on end results.

Does your bank generate leads from being involved in the community?

- Jeff

The Kafafian Group website of products and services/performance measurement

http://tinyurl.com/ydhg4cs