Are banks overlooking one of the biggest bangs for their investment buck?

Cornerstone Advisors ' recent “What’s Going On In Banking ” report included survey responses from bank executives that reflected the following:

• Top Concerns: Cost of funds, interest rate environment, efficiency
• Top Efficiency and Cost Savings Priorities: Streamline workflow for more efficiency, improve efficiency ratio, improve reporting to reveal operating costs and inefficiencies
• Top Deposit Attraction Approaches: Targeted pricing strategies for specific clients/prospects
• Top Lending Priorities: Commercial C&I loans

Interestingly, survey responses for the following topic included more than 26 items, and NONE of them were pricing or coaching platforms.

• Banks’ new system selections/replacements

Most banks still use calculator tools for commercial banking relationship pricing, often in the form of spreadsheets, along with static pricing policies, varying degrees of manager coaching, and manual governance. But pricing is where the rubber meets the road around the survey responses above. It's where the delivery of differentiating value and risk-adjusted return are balanced with efficiency - when it’s handled properly. Commercial bankers are at a competitive disadvantage without a pricing and coaching platform that includes:

• contextual insights to guide and optimize pricing and structuring at both the opportunity and relationship levels
• flexibility to tailor Interest Rate Risk (FTP/Liquidity Premium/Optionality), Credit Risk (tailored PD/LGD), Capital Deployment, and Delivery Costs to align with strategies
• scenario modeling with sensitivity analysis to provide risk-based options that balance client/prospect and bank priorities
• deal team collaboration
• customizable interactive coaching, including portfolio and competitive market insights
• integration with other aspects of deal workflow

So, commercial banking executives, I ask you: Does your pricing process empower winning behaviors and sustainable performance through changing market conditions? If not, what investments are being prioritized over this?

What sort of bank do you want to be? ?Let's talk...

Jason Carr, Senior Director, Q2 | PrecisionLender