Thursday, March 26, 2020

I've Closed My Lobbies: Now What?

This is my third weekly update to you during the COVID-19 situation.  I’m simply trying to help by keeping you focused on managing your bank as well as you can.  Your employees, your customers, and your communities need you.

First, as I’ve said before, keep doing what community banks do – meeting the unique needs of customers.  In today’s environment, it means closing lobbies to protect the health of employees and customers, while making yourself available via phone, email, and even in-person meetings to be sure your customers’ needs are met.

Maybe I should have said “first, communicate well” but I’ll address that now.  Even if you are doing the right things, all around, it won’t matter much if customers don’t know.  Make sure you are communicating information about hours and methods of operation, how to contact you if in-person appointments are necessary (ranging from business discussions to safe deposit access), using the optimum communications methods in your markets.  Remind them that the authorities consider banking an “essential” service and that you will remain open.  This starts with good signage (hopefully your communities are relaxing any signage rules during this time) at your locations, updating your web site (a stale web site communicates the wrong message, so update it often) traditional media outlets, and various social media channels including Facebook and Twitter.  Messages need to be simple and concise.  Make sure you are answering the phones promptly, in a positive, reassuring manner.

I’m operating on the assumption (based on a lot of discussions) that most of you are not as busy as normal.  Make sure you take advantage of these slow periods to address important projects.

Here are three areas that you may want to consider.

Ø  Lending: make sure you have a plan to renew and extend operating loans, including (for many of you) ag loans to help farmers prepare for planting.  Stay in touch with your farmers, as many areas are also dealing with way too much rain, which may delay planting and impact crop choices, or require farmers to file insurance claims.

Ø  Source of funds: we love small businesses, because they are a good source of low-cost funds.  Make sure you stay in touch with your most reliable depositors, and find ways to help them.  If they are burning through cash, struggling to make payroll, etc., look for creative ways to keep them afloat.  They need you, and you need them.   Of course, if you see that commonly available deposits are dwindling, you’ll also need to consider alternate funding sources, so now is the time to assess your current borrowing capabilities, as well as considering CD promotions to gather additional funds.

Ø  Projects: Let’s get a handle on projects that you have underway: acquisitions, developing new products and services, renewing or renegotiating vendor agreements, or opening new facilities.  While some of these efforts may slow down a bit, there may be deadlines for deals to get done that you want to honor.  Don’t let a temporary situation prevent you from making good long-term decisions.  Dust off that strategy and let’s talk about how to keep you focused on the future while you manage the present.


Odds and Ends

Ø  Remind your employees to look for fraud.  If it doesn’t “feel” right, ask for help before you cash that check, or wire those funds.  Sadly, there are many looking to exploit the difficult times we are operating in.

Ø  Keep your ATMs full.  There’s plenty of cash.  But the last thing you need is for an ATM to run out of money and someone post that on Facebook!  Look at how irrationally people are shopping.  They will fall for a “cash shortage” situation without fact checking, and you may have a run on your hands.  Keeping that ATM full is a good way to protect yourself . . . but you also want to review with your employees your plans for responding to a run on cash. (thanks to alert reader DF for the ATM tip)

Ø  Work to keep up morale.  As a manager, stay visible, stay positive, and LEAD.  Don’t be paralyzed by the situation.

Ø  Finally – feel free to share any tips with me about what’s working for you – I will include them in my next letter.


As always, I’m here if you need me.  Call, email, or whatever works.  Day or night.

Trent Fleming
(901)896-4007



Thursday, March 19, 2020

Controlling the Message


Since my last update a week ago, I’ve had the privilege of speaking with several of you as you consider how to respond to the COVID-19 situation.  There’s of course the need to assess CDC recommendations and local government issuances, in order to determine what your operations should look like.  There’s the possibility of closing lobbies, closing branches, changing working hours, or reducing staff.  Among other things.

Here’s my key advice – focus on communication.  You can either tell your own story, or let rumors tell it for you.  Guess which is better?

A part of your response plan has to be keeping employees and customers up to date on your efforts, and how you will provide service.  We talked last week about evaluating current activity, leaning toward drive-thru service and promoting remote delivery channels that you already offer.  These are the basics.

Please also consider offering home/office pickup for deposits or the return of signed documents, if customers are concerned about coming into the bank.  Even curb side pickup of documents and deposits (park outside and let us know you are here) may be needed to alleviate customer fears.  The bottom line is this: make sure you are doing what community banks always do well – meeting the needs of your customers, however unique.  Of course, make sure you can do this efficiently and safely.

Internally, extra precautions to keep exposed surfaces clean are certainly important, and you want to advertise that you are doing this, as well as instructing employees who don’t feel well to stay at home.  Remember too that money is always dirty.  Extra treatment with disinfectant is probably a good idea (all the time), and make sure to emphasize handwashing after handling cash.

Closing the lobby will be seen as a big deal, so do this thoughtfully and with plenty of notice.  Limiting lobby traffic (some of you already have experience with this in high crime areas) is another consideration, but some combination of reduced lobby hours, and limiting the number of customers in the bank at one time, may be the right course of action, depending on the situation in your area.

Again – communicate. Use customer email addresses if you have them, leverage your Facebook or Twitter presence for one to many communications, and issue press releases to local media so that you are controlling the message.

Finally, a word about your ongoing projects, whether you are considering acquisitions, adding new products or services, or replacing existing systems.  Now is not the time to shelve those projects.  When business returns to a normal pace, you will be behind if you haven’t kept abreast of new things.  So let’s leverage technology to keep these projects moving forward, so that you don’t fall behind.  Consider devoting employees who are working remotely to the task of addressing data quality and integrity in your files, working to improve the overall value of your customer data.  Employees in the bank might have enough free time to help you catch up with the scanning and indexing of documents.  I’m sure you can find other examples.  A proper response to the current situation will not consume all your time unless you allow it to.

I remain ready and able to advise you in these matters.

Trent Fleming
901-896-4007

Thursday, March 12, 2020

Are You Prepared?

I am sure you are hearing from many fronts about concerns and preparations over the Corona virus issue.  My favorite hardware store even sent me a note about how concerned they are.  It is important to heed advice from your governmental and health care authorities.  I will not speak to the medical side of the issue, primarily because - in spite of being a regular at the Holiday Inn Express - I am in fact not a doctor.  I am someone with extensive experience in disaster recovery, contingency planning, crisis management and PR.  So I’ll take that approach.
What I want to provide are some common-sense steps you should consider relative to your bank and branch operations.  Let’s remember that the goal is to maintain an adequate level of service for your customers, while ensuring a safe working environment for your staff.  Most of the suggested measures below will serve to improve your overall readiness for any kind of business disruption, so there’s a silver lining in the current cloud for you.
Take some time now to understand actual traffic counts in your lobbies.   I suggest you attempt to identify the volume of traffic, and the type of encounter or transaction being conducted on each visit. This will give you an important picture of actual activity.   Simply put: transactions of any sort (financial, address change, new accounts, loan applications, etc.) by hour by day in each location.
It is important to segregate drive-up teller activity from walk-in activity, as one consideration would be to move to drive-in only traffic for all teller activity.  
As a way of assessing overall activity, go ahead and bring remote delivery channel transactions into your reporting, so that you have a complete picture.  This would include balance inquiry, funds transfer, bill payment, on-line applications, and mobile or remote deposit.  The purpose of gathering this data in the short term is to help you assess just how much activity you have, and plan for ways of accommodating these transactions if you have to reduce services.   In the long run, measuring in-person vs virtual activity is a solid management tool.
Prepare for one or more of your locations to be in a quarantined area, and make sure you are prepared to communicate to customers that a particular location is closed, and where they can find the next closest location that is open for business.  Note that this is good advice for any number of scenarios that might impact branch operations, ranging from severe weather to robbery aftermath, so think broadly when developing these communication plans.
Aggressively remind customers about your remote delivery channel options, including Internet, mobile, remote deposit, and on-line account opening or applications.  You may want to loosen current deposit restrictions (only for existing customers) to ensure that they can use those channels for all of their standard deposit activity.  Of course, you must consider the risks involved with any changes in these parameters, but in general terms, (as I’ve told you for years) allowing existing customers to make their normal deposits through an alternate channel does not really introduce additional risk. 
What’s the best way to communicate with your customers?  Ideally, you have good email addresses for all those who use your remote delivery channels.  You will also find that social media like FaceBook or Twitter can provide excellent “one to many” communications for notifying customers and the public in general about your operations.
Let’s talk about your staffing needs.  We often see references to “non-essential” employees when operations are limited during severe weather, or other situations.  No one wants to be considered non-essential, so let’s avoid using that term.  Let’s do however determine what a minimal staffing scenario looks like, so that you can reduce person to person contact, account for those who are ill and may need to be out for an extended time, etc.  Take a close look at your overall operations across all applications: loan, deposits, accounting, etc., and make sure you have good coverage if staff has to be reduced.  
Evaluate work at home scenarios, realizing that some of the steps we’ve discussed above may reduce branch traffic and allow you to handle daily work with a limited staff.  One key best practice is to encourage employees who are sick to stay at home.  The old work ethic of “come to work at any cost” has to be replaced by common sense, and managerial understanding, especially during flu season, and in light of any situation like the current virus outbreak.
It is wise to communicate with your primary regulator about any significant changes in your operations – reducing hours, staff, or changing service levels (such as moving to drive-in only for teller transactions).  They may provide additional guidance for you, but I think mainly they will want to be sure you have a plan in place are are managing to this plan.
Finally, as in any crisis management situation, employees need to understand that ONLY a designated spokesman is allowed to speak for the bank.  Employees should not provide any information on behalf of the bank to anyone, including friends, family, strangers or news media but should instead refer any questions to the bank’s designated spokesperson.  Here again, this applies broadly to any situation, not just the current virus outbreak concerns.
I hope I’ve given you some constructive ideas for dealing with the present environment, while making sure your existing plans are updated to provide the best chance of success.  Working on these matters is a far better exercise than watching endless news coverage or fretting over possible outcomes.  In addition, if you do not have some of the tools mentioned above, like on-line account opening, or remote access for traveling employees, it might be time to add those to your technology planning wish list so that you are better prepared in the future.
As always, I stand ready to help.  Email, text, or call me anytime if you would like to discuss these or other matters.  I remain hopeful, and intend to do everything I can to help community banks thrive.
Trent Fleming
trent@trentfleming.com
901-896-4007