Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewcost containment: small ideas work
This year is off to a not to great start. 1Q10 earnings have not been rounded up yet, but the industry is clearly under continued earnings pressure.
It is at times like this that the hatchets come out and cost cutting, often to the bone, commences. Below is an inventory of ideas that might not give you a home run, but are also far from the bone. Many are truly in the weeds, so refer them to the appropriate person in your company for evaluation. Some you might already be doing, some might work for you, others not, and others might spark new thinking.
· Use MacroExpress to send mass distributions of reports out via email instead of manually producing the email and attaching the report to it.
· Use Foxtrot to take data and populate it in a system, e.g. appending email addresses to your MCIF.
· Automate accounting reconcilements using readily available software.
· Renegotiate contracts across the board.
· Use Frontier (by FiServ) to match files and yield exceptions as a replacement to manual matching (e.g. Fed file) and reduce account reconciliation manual labor.
· Undertake process mapping internally every 2-3 years to yield on-going efficiencies and organizational improvement. Report and document cost savings annually, which will help you avoid “project” driven cost cutting.
· Install cash recyclers, especially in drive-ups, to enhance teller productivity and reduce shortages.
· Use V fold perforated postcards for notices instead of envelopes. Revisit notices frequency to ensure you’re not over-informing.
· Create your own, even rudimentary, performance benchmarks for back office functions to generate a rough staffing model. E.g., measure approximately how long does it take to board a commercial loan, then staff to loan production.
· Recalibrate both front and back office staffing needs to lower check volumes.
· Eliminate courier, especially to the branches, and use carefully-negotiated overnight express services as needed. You can also use scans and faxes instead of courier.
· Use an ATM processor as an intermediary between you and the various ATM networks you work with. It’s often more efficient that you trying to make it work yourself.
· Carefully audit core systems and telecommunication bills to ensure accuracy. There are vendors, such as Invoice Insight, who have software to scan bills and generate alerts if needed.
· Split your first line ATM replenishment between two vendors to maximize price efficiency. Focus on both outgoing and in-clearing in your price negotiations.
· Outsource your mailing facility (printing, statements, letters etc.). Pitney Bowes comes highly recommended.
· Move if you can – rents are cheaper now.
· Increase your WAN power to eliminate T-1 lines. It’s often more cost effective.
· Centralize procurement: purchasing; contracts and vendor management; payables; RFPs. ONLY do so if you have a very capable person to get the job done.
· Consider multifunctional office equipment, so long as its placement does not interfere or impede work flows.
Cost containment works best when it is integrated into the bank’s culture. This isn’t easy to accomplish, but continued vigilance, celebration of results and positive reinforcement go a long way toward integrating cost consciousness into day-today management, and it pays dividends forever.