Year-End Planning is Key for Banks


Consider some strategies to improve 2019 performance

The end of a year is a great time to reflect on the successes of 2018.  But even more important, this is the right time to evaluate key elements of your operations, and identify some areas where you can start a year of performance improvement.

Review your talent management program.

If you don’t have a discipline in place to assess your people needs, address issues with current employees and protect the stars on your team, you may find yourself falling victim to a continuing trend.  The redefinition of work means talented young people are choosing the growing freelance economy to create the lifestyles they desire.  And that means it’s increasingly difficult for the banking sector to attract and retain the skilled, ambitious workers you need.

It’s critical to understand your workforce and your upcoming needs.  Make sure you know your “A” players, and assign a member of management to coach and mentor each one.  Did you lose someone valuable in the last 12 months?  Make sure you know why.  Active management of talent – particularly top talent – will be an ongoing need as you enter 2019.

If you’re concerned about creating the proper talent management program, or you’ve lost valuable staff when you didn’t expect to in 2018, consider an independent assessment that could identify those at risk, and recommend practices to attract and retain your stars.

Review your compensation plans.

In this time of fierce competition for talent, of course compensation is a key factor in your talent management strategy.  But your compensation strategy should also be designed to drive business results.

What is your strategy for front-line staff – do you have the most effective and efficient compensation plans to meet the business goals?  How about operations staff?  Don’t forget how important the back office is to your bank’s success.  Does everyone get to participate in incentive programs – and do they work? Are the plans compliant with expectations of the regulatory community?

We can all recall news stories about compensation driving behaviors we wouldn’t want to see from our teams; conversely, there is a school of thought that if everyone is paid the same way that they will also all perform the same way. The power of money can be properly exercised to drive the right behaviors and the right results.

If you missed the mark on some specific goals this year, you’ll want to assess whether your people were properly motivated to meet them. 

Evaluate your outsourced services.

Banks use consultants to perform a wide variety of tasks, usually from an independence standpoint, but now more frequently because capacity or technical expertise isn’t available. It’s an effective and efficient solution for dozens of processes, allowing internal resources to be deployed elsewhere.  You’re getting access to specialized skills and talents, and you don’t have to manage the staff directly.

But are you getting the best value?

Whether you’re outsourcing Bank Secrecy Act/anti-money laundering compliance review or information security assessment, consider whether you can outsource several services to one consulting firm for a more cohesive service experience.  Also, can some of the outsourced tasks be done during slower periods for your preferred providers?

Ask your internal stakeholders to develop a schedule of procedures they perform regularly, and identify the current and potential providers.  Ask their preferred consultants to bid on a larger group of services or to recommend scheduling that could improve the relationship value. 

Consider implementing new business lines.

Are you getting all the business you can? We all know that banking today is not the same as it was decades ago.

New business lines like investment management, residential lending, broker-dealer, or private banking might be your next revenue source.  This year, why not budget to evaluate and research new business lines?  You don’t need to commit to a full roll-out until you’ve completely evaluated the market and tested your assumptions.  But standing still isn’t going to improve your market position.

Team up some ambitious bankers with outside consultants to size the market, create business plans, and establish pilots.

Evaluating your results for 2018 is an essential exercise.  But looking ahead to 2019 and setting some new policies and plans in place is just as important as we close the calendar year.  If you’d like a sounding board for these ideas or others, please reach out.

Jay Pelham, CFP®, is a Client Services Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.

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