Episode 10 – October 26, 2016

Bigger Banks Gobble Up a Larger Share of Deposits / Wells Fargo Update and Measuring Performance to Incent Desired Behavior / Banking and Robotics

        • Host: Sharon Lorman, Vice President
          Panel: Jeff Marsico, EVP; Rich Trauger, Managing Director; Gregg Wagner, Managing Director

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      • Podcast Show Notes:

      • This Month In Banking (TMIB) highlights significant news and events in banking, along with interviews with industry thought leaders. New episodes will be available on the last Wednesday of every month here, on Stitcher, Soundcloud, and iTunes for your listening enjoyment. Join us on your commute or at your desk.
      • Topic 1: Bigger Banks Gobble Up a Larger Share of Deposits

      • Start time 1:20
      • Deposits at banks with assets of at least $10 billion rose 6.67% from June 30, 2015 to June 30, 2016, according to new data from the Federal Deposit Insurance Corp. Meanwhile, banks with less than $100 million of assets saw their total deposits shrink by 8.7% between mid-2015 and mid-2016. Institutions with between $100 million and $1 billion of assets did somewhat better than the smallest firms, but they still experienced a 2.6% decline in deposits.
      • While consolidation can account for some of the decline, what does this trend mean to community banks?
      • How do community banks win customers from the larger banks?
      • Topic 2: Wells Fargo Bank Update and Measuring Performance to Incent Desired Behavior

      • Start time 11:26
      • Wells Fargo said on Oct. 12 that John Stumpf was retiring as Chairman and CEO and would be replaced by President and Chief Operating Officer Tim Sloan. He stepped aside amid anger from investors and policymakers over the creation of fraudulent customer accounts. The misconduct, carried out by staff to meet internal sales targets, hurt the bank’s image and federal and state investigations followed. Just this week it was reported that the California Attorney General’s Office has launched a criminal investigation.
      • Stumpf’s resignation illustrates the pitfalls of a culture built on selling as many products as possible and using products per customer as an incentive point.
      • What other measures could be used as a basis to incent employees to attract core deposits?
      • Topic 3: Banking and Robotics

      • Start time 25:00
      • IBM has agreed to buy Promontory Financial Group, which specializes in regulatory compliance consulting for financial institutions and employs 600 professionals. The purchase would form the basis of a new “Watson Financial Services portfolio,” according to IBM. Separately, Royal Bank of Scotland is teaming with IBM Watson for a ‘chat bot’, designed to answer basic customer inquiries.
      • Are bots the means that banks can use to streamline repetitive processes, reduce cost and invest more heavily in customer facing technology and personnel?
      • Bonus Topic: Bob Dylan!

      • Bob Dylan is the winner of the 2016 Nobel Prize for Literature, and he is in a new commercial for IBM Watson. A MarketWatch article entitled “Bob Dylan was Also a Brilliant Economist” published this month talks about how Dylan’s lyrics are about money and the economy. According to the Swedish Academy, Dylan won the Nobel prize “for having created new poetic expressions within the great American song tradition.”

Watch for episode 11 of This Month in Banking to be released on Wednesday, November 30, 2016 and a new episode on the last Wednesday of every month.

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