Keep It Simple

by. Jeff Falk

With the U.S. economy finally emerging from some really tough economic years, financial institutions (FIs) are looking to return to business as normal. Some of the strategies they are employing include more aggressive lending, new products and services and new branch locations. Yet some industry experts are encouraging FIs to remain cautious, making keeping it simple the new rule of the road.

According to business consulting firm Bain & Company, it will be important for FIs to focus on three tactics to protect their brands and establish profitable growth:

1. Strengthen the foundation. FIs should focus on the balance sheet, potentially adopting a top-down approach to managing both capital and liquidity. And, although things are improving, brainstorming methods for lowering the cost of business is typically a fruitful exercise.

2. Become more flexible, agile and adaptable. The current economic climate demands that FIs, particularly smaller institutions like credit unions and community-based banks, develop quicker reflexes by widening the issues and geographies they serve. Although due process is a must in this strict regulatory environment, FIs able to make faster, better decisions will have a definite competitive advantage.

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