Commercial Loan Automation
Small Business Banking
finding the right commercial banker
Commercial bankers (RMs) are the backbone of the commercial banking business. For many years they were grown by the larger banks’ credit training programs, only to be picked off by smaller banks. It was an excellent system that worked (almost) for everyone, until the megabanks discontinued their credit training programs.
Smaller banks witnessed the change, but felt they could not afford to build their own training programs. In addition, when they did take a stab at training fresh college graduates, they were picked off by others as well (typically larger banks for higher pay).
Consequently, few RMs were “created” for a decade or more. The business now finds itself with many highly skilled RMs who are in their forties or older, and not enough bench strength or a feeder system to fill the ranks with younger, up and coming RMs.
Banks of all sizes realized that the most practical solution to the problem is to grow their own RMs, steeped in their own credit culture and connected to the rest of the organization. They “went back to the future” and started developing their own credit training programs. The quandary today is, who are the best candidates for these programs who can be groomed into successful RMs?
Human Resource recruiters have been looking for the next generation of RMs for several years now. A typical set of qualifications includes a finance or accounting college degree from a good school with excellent grades. At the same time, when I asked our Commercial Banking Forum attendees what are the personal background and characteristics of their rising stars, I got a different and unique picture. Here are some of the key aspects mentioned in our groups for the best new RMs in the business. You may or may not agree with these characteristics, but here they are.
NOTE: These are HUGE generalizations. Take them for what they are – at best, indicators for a better recruitment hit ratio.
- Ethics and trust
Those are given in any banking position, but still bear mentioning considering their critical importance.
- Doing the right job and not getting distracted by less-value-added activities
Some folks gravitate toward “safer”, less productive activities on the administration end of the business. Strong RMs are gregarious individuals, who prefer to be out in the field and connect with clients, prospects and CIOs.
- Formal credit training
A good commercial banker needs to understand credit. It’s a prerequisite of the job in all but the largest banks. My comments on this requirement:
- Spending six months in the credit department is enough to get a person jump-started on the topic.
- Spending time in the special assets/workout department is priceless
- Natural grit and a measure of cynicism
Our Forum members say that a healthy dose of cynicism helps in this role, as some borrowers might not fully disclose their financial situation. We typically don’t see this personality characteristics among the specs for the position, but I can see why it is important.
- Competitiveness and drive
Any good sales person needs to be driven. There isn’t enough sales management in the world to embed drive into a passive person. Strong RMs like to achieve well beyond their goals to levels that are self-imposed. They derive much satisfaction from breaking records, being first and beating their friendly competitors. A strong sports history might be a good indicator of this theme.
Similarly, a history of playing sports is an asset when it comes to team building and being of service to the team. Assisting in achieving the “win” is a critical element of success and praise in team sports, and equally important in the commercial banking world.
- Second-tier schools, not the best students
It appears that the better RMs come from second-tier schools. Many banks look for recruits elsewhere, but the consensus is that those graduates generally are looking for something different other than a career in banking.
Our Forum members felt that graduates with average GPAs have done better than the top-of-the-class candidates. The common sentiment was that they were less academically inclined and more practical.
- Resiliency and ability to handle rejection
Success in this position means you’ll hear “no” at least 90% of the time. This requires strength and resiliency, especially as successful RMs are often sensitive to others’ opinions. They should have a strong enough ego to persevere through the sea of rejection and get enough emotional gratification from the “wins” they achieve.
- Family background
Some backgrounds yield better RMs than others, it seems. Those that grew up on a farm, in a military family and generally in a difficult environment appear to be more resilient and committed to achievement. Anyone who has faced adversity, be it economic or emotional, will fight harder for a sale than those who do not have to get it to survive and prosper.
- Inquisitive and learning
Curiosity is a key aspect of the job. The desire to learn and willingness to ask questions lead to better credits and stronger relationship building. Questioning the information presented to you and overall curiosity about your borrower, COI or contact are both assets in the position.
Similarly, seeking mentors and looking for learnings from more experienced RMs are important to the personal development and pace of learning of a junior banker.
- Liberal arts/creative background
The common wisdom that a financial background is the best backdrop to RM development hasn’t been proven to our members. Many advocated hiring from liberal arts colleges, sharing that creativity is an important part of the job. While being mathematically inclined is certainly relevant, the ability to think outside the box makes for better deal makers.
- Psychological assessment
At the end of the day, I personally found that assessments such as Predictive Index are better predictor of a person’s effectiveness in the job than my own interviewing skills. Experience can be gained, but personality can’t be changed. Ensuring a good match between the prospect’s personality and value system and the bank’s is key to success. RMs are the face of the organization, interacting with key customers. They will represent the bank better if they identify with the company’s culture and values.