Yep, the 90s. It was all the rage and I jumped on board like a millennial on the Grateful Dead Fare Thee Well scene – I’m not sure what it’s all about, but I want to say I was there.
Plansmith has been building financial planning software for community banks for over 45 years. More than just coding keystrokes and calculations, though, we understand the real process of planning and build systems that seamlessly integrate into that process.
In the last post, we discussed the responsibilities and planning software opportunities of the Asset Liability Committee (ALCO), Investments/Funds Management, and the CFO. This post will address the role of the Community Bank's Branch/Department Managers, the Marketing Department, and the CEO/The Board.
Who in your community bank should be using planning specialty software? Accounting, the Board, the ALCO? You might be surprised as to how many various areas/departments and their respective managers should actively use and benefit from an automated planning system.
What are the various functional areas and departments that should be actively involved in planning at your community bank?
"Life is really simple, but we insist on making it complicated." - Confucius
Margin risk tolerance calculates the minimum net interest income and net interest margin necessary to maintain continuing operations. Minimum margin consists of two basic components: 1) earnings needed to maintain an acceptable capital ratio and pay dividends, and 2) earnings needed for overhead.
In our ever increasing efforts to educate and inform, our marketing department here at team Plansmith has been on me to contribute to our Blog. Quite frankly, I’m not really a "blog" guy, but for those of you that know me, I’m not short on opinions either. So, given that I sit here stuck on a plane for a few hours, this seems like a good time to take a shot at it.
Although social media has been around for a while now, business profiles are still relatively new. Many financial institutions are still finding their way to the social media arena. As social media keeps growing in popularity, it is important that financial institutions climb on the bandwagon as well.
Gap, beta-adjusted gap, duration and even basic budgeting models only frustrate, confuse and even mislead the financial institution’s asset liability management committee (ALCO). Detailed gap analysis, fiddling with the distribution of savings balances and even calculating the duration of equity does not lead to better margins, nor do they mitigate rate risk.