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The Top 5 Strategically Speaking Posts of 2016

Posted by Strategically Speaking

Dec 21, 2016 11:15:00 AM

Whether you're traveling this weekend to visit family or staying in with your loved ones, take a moment to view some of the most popular Strategically Speaking posts of 2016.

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Topics: Financial Services Industry

Ditch the Map!…Navigating a Changing Portfolio

Posted by Ken Summar

Dec 16, 2016 9:15:00 AM

 

In discussing strategic objectives with financial institutions across the United States, a common theme that I hear from CEOs and Chief Credit Officers is the need to diversify their loan portfolios so they aren't so concentrated in commercial real estate. And a common solution they are considering is to increase commercial and industrial (C&I) lending. 

What is that old saying? …“Easy to say. Hard to do.” 

Why is diversifying your loan portfolio difficult? Is it because businesses in your area don’t need working capital financing to help them thrive and create employment? I doubt that. 

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Topics: Commercial Lending

Work Smarter - Not Harder

Posted by Brynn Ammon

Dec 14, 2016 11:30:00 AM

Systems are smarter today than ever before. Yet, at financial institutions everywhere, there are still employees working from paper reports daily. Technology has the ability to provide snapshot data at a moment’s notice for review, but your users still use processes that create work for themselves and others in the institution. Efficiency is not always about shiny new tools and robust software solutions. Very often, you already own the shiny, robust tools needed to operate efficiently… you just need someone in the organization to point them out. 

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Topics: Financial Services Industry, Processes & Procedures

3 Ways Credit Unions Can Make Their MBL Troubles All but Disappear

Posted by Jonathan Patrick

Dec 7, 2016 11:30:00 AM

Some credit unions didn’t get the news they wanted regarding recent changes by the National Credit Union Association (NCUA) to the Member Business Lending (MBL) regulations. The announcement included the removal of the requirement for personal guarantees from business loan borrowers. What the announcement didn’t include, to the chagrin of some credit unions, was the removal of the so-called “MBL cap.” If you aren’t familiar with this part of the regulation, Section 723.16(a) states “The aggregate limit on a credit union's net member business loan balances is the lesser of 1.75 times the credit union's net worth or 12.25% of the credit union's total assets.”

The MBL cap has long been a regulatory sore spot with some credit unions and some government officials. As far back as 2010, there were U.S. Congressmen sponsoring legislation to increase the MBL cap. Even as recent as May 2016, there were Congressional leaders expressing their desire to see the cap increased to encourage credit unions to expand lending to small business owners. (1) But the reality is that raising the cap would only positively impact a small number of credit unions. Credit Union Journal pointed out that of the 5,954 federally insured credit unions, only 106 credit unions were relatively close to the cap. (2)

Why then is the MBL cap such a “hot button” for some credit unions, especially when there are several ways, other than new legislation, to work around the cap?

 

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Topics: Regulatory Compliance, Credit Unions

Commercial Lending in the Coming Year – Trends to Watch

Posted by Patrick True

Dec 2, 2016 2:00:00 PM

The business of banking has changed dramatically since the beginning of our new century.  Competition for both CRE and C&I loans has intensified. Non-bank firms have introduced technology to enhance application timing and workflow. New risk management tools are available to better manage the debtor/creditor relationship. All in all, the landscape we see as we enter 2017 is dramatically different from what many of us ever experienced in the 1980s, 1990s, or even the 2000s. 

While there is no way to predict economic activity during the coming year, we can say that the following seven trends will almost certainly continue:

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Topics: Commercial Lending

Storing Data in a Mountain… So What?

Posted by Tammy Bangs

Nov 30, 2016 11:15:00 AM

It’s no secret that pirate folklore included countless tales of buried treasure. One famous pirate, Captain William Kidd, was even noted as having buried his loot off the coast of Long Island because to him, the safest place to store what was most important to him was under the ground.

Today, the same principle is being applied to many financial institutions around the world (in a more positive light this time around). Many banks and credit unions rely on their data so much that a crucial malfunction resulting in the loss of that data would be devastating to both the financial institution and their customers. In an effort to preserve their data, these FIs have opted to bury their information underground … literally!

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Topics: Risk Mitigation, Data Management

Recap: 3 Core Blog Posts for Your Thanksgiving Holiday

Posted by Strategically Speaking

Nov 23, 2016 11:30:00 AM

We have a lot to be thankful for this Thanksgiving.

Strategically Speaking and everyone at Jack Henry & Associates wishes to thank our readers for years of support. It is our mission to bring readers informative and educational topics to help expand their knowledge on subjects within the industry. 

We also wish to thank all of our authors for contributing such interesting and informative blog posts over the years. Their expertise have given us an insight into everything happening behind the fintech scenes - helping to break down complicated topics and provide useful tips for preforming at the highest level.

This week, Strategically Speaking will be taking a break to enjoy the Thanksgiving holiday. As there will be no new blog posts this week, here are several core-related posts from earlier this year that we believe deserve another read-through, including one from contributing author Trent Fleming (http://trentfleming.com/), Stacey Zengel, President of Jack Henry Banking, and Susan Griffin, Industry Analyst of Jack Henry's Strategic Initiatives Group.

Have a happy Thanksgiving and we'll see you all next week! 

 

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Topics: Financial Services Industry

The Benefits of Early CECL Adoption

Posted by Jerry Boebel

Nov 18, 2016 11:45:00 AM

FASB’s Accounting Standards Update (ASU) No. 2016-13 (more commonly referred to as CECL) was released earlier this year in June. At first look, the implementation dates for CECL are so far out that this project may not rank very high on a management team’s to-do list.

  • Public business entities (PBEs) that are SEC registered have a regulatory reporting effective date March 31, 2020.
  • Other PBEs March 31, 2021
  • Private companies December 31, 2021
  • Early application for all entities December 15, 2018

However, there are potential benefits to moving CECL up in priority and adopting the accounting standard early.

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Topics: Commercial Lending

Stand Pat and Starve. Diversify and Thrive.

Posted by Mark Messick

Nov 16, 2016 11:15:00 AM

Because of the recent scrutiny over commercial real estate concentrations and lower-than-expected yields, financial institutions (FIs) have been searching for ways to grow loans and raise profitability. Unfortunately, aside from consumer and commercial and industrial (C&I) lending, lenders don’t see a lot of options. In fact, with the onset of poor performance in the consumer loan space, many FIs have chosen to make business lending a priority. And then a slowdown in the economy, uncertainty about our next president, and competition for the better credits led business lending volumes to fall for the first time in six years according to the Wall Street Journal.

So what’s the response?

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Topics: Lending

Ubiquity Is Key!

Posted by Al Suosso

Nov 9, 2016 11:00:00 AM

Truly effective customer relationship management (CRM) can only be accomplished if it is adopted on an enterprise-wide basis. Achieving an exceptional adoption rate has been a continuing challenge for financial institutions (FIs) of all sizes. One of the biggest challenges has been the lack of access to CRM tools within the applications that are used on a day to day basis by associates in varying departments within the FI.

To do their job efficiently, tellers must remain largely focused on the teller processing application presented on their desktop. Quickly handling routine and more complex transactions for customers is their primary role; however, a teller has a unique opportunity to provide customers with much more than a good transaction experience.

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Topics: Relationship Management, Customer Experience

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