Episode 13 – January 25, 2017

Blockchain 101 / New Pay Structure for Wells Fargo Branch Employees / Did Bank of America Underpay FDIC Premiums?

        • Host: Sharon Lorman, Vice President
          Panel: Jeff Marsico, EVP; Rich Trauger, Managing Director
          Guest: Bryan Yurcan, Senior Writer, American Banker

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      • Podcast Show Notes:

      • Our This Month In Banking (TMIB) podcast features discussion with colleagues and other industry thought leaders on interesting banking news that happened this month. TMIB 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: Blockchain 101

      • Start time 1:53
      • This month Bryan Yurcan was TMIB’s guest for the first topic. Yurcan is a senior writer with American Banker, with a focus on financial technology. He has written two white papers on blockchain and the links can be found below.
      • Deloitte announced the opening of a laboratory in New York devoted to exploring blockchain solutions for the financial services industry. It is Deloitte’s second lab dedicated to blockchain. The company’s first blockchain lab opened in Ireland last May and more are expected to open throughout the year. The firm has 800 people in 20 countries dedicated to blockchain.
      • What is blockchain technology? If you can’t answer the question, this podcast is for you! The discussion focuses on blockchain and its application in financial services.
      • For American Banker Preferred Subscribers:
        Blockchains in Action
        Blockchains and Shared Ledgers: A Banker’s Guide

      • Topic 2: New Pay Structure for Wells Fargo Branch Employees

      • Start time 19:50
      • Wells Fargo & Company said on January 10th that it will restructure incentive plans to focus on the relationships with customers rather than meeting individual sales quotas. Emphasis will be placed on evaluating the banker’s performance on customer service, usage and growth. Metrics will be used that take a longer view of the customer relationship and incorporate exceptional customer experiences and retention. The new structure will also evaluate entry-level bankers based on team performance, rather than on an individual basis. The pay structure for most bank branch employees will shift to decrease the amount of variable pay (compensation) and increase the base salary. Wells’ executives hope culture change will slowly follow in order to revitalize the brand with its customers.
      • Will this actually bring about culture change? If so, is it too late to change consumer’s minds?
      • Topic 3: Did Bank of America Underpay FDIC Premiums?

      • Start time 29:50
      • Bank of America is being accused of underpaying deposit insurance premiums to the FDIC. The FDIC filed a lawsuit in federal court on Monday, January 9, 2017 demanding that Bank of America pay $542 million it owes to the regulator’s deposit insurance fund. The lawsuit states that the FDIC maintains that Bank of America (BAC) underreported a key risk metric by tens of billions of dollars during the final three quarters of 2013 and all of 2014. The FDIC said that allowed Bank of America to appear less risky and avoid paying an average of $77 million each quarter into the FDIC’s deposit insurance fund.
      • How does the 1.15% threshold being achieved really impact community banks?

Watch for episode 14 of This Month in Banking to be released on Wednesday, February 22, 2017 and a new episode on the last Wednesday of every month.

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